Clearstream, a subsidiary of Deutsche Börse Group and a central securities depository (CSD), will be joining the European Central Bank (ECB) in trials for a digital euro wholesale central bank digital currency (CBDC). As the only CSD participating in the initial phase of the ECB’s preparatory trials, Clearstream, which operates the D7 post-trade platform, will be testing the use of distributed ledger technology (DLT) for wholesale transactions with tokenized securities. It will also be linking to three European central bank products: Deutsche Bundesbank’s Trigger Solution, Banca d’Italia’s TIPS Hash-link, and Banque de France’s Full DLT Interoperability.
Clearstream worked with Google Cloud to enhance the capacities of the D7 platform. The tests, which will involve euro-denominated issuances and delivery-versus-payment (DvP) transactions across various use cases and payment models, are scheduled to take place from May to November of this year and will utilize real central bank money.
The ECB initiated the preparatory phase of its digital euro research in October, following a two-year investigative phase. In January, it issued a vendor call for the project. Banca d’Italia and Deutsche Bundesbank have already begun working with similar DLT technology in 2021. Additionally, Banca d’Italia signed a memorandum of understanding with the Bank of Korea at the end of 2023 to explore settlement systems and CBDC.
With over 18 trillion euros in assets under custody, Clearstream has been actively involved in experiments with CBDC and tokenized assets, including participating in SWIFT experiments in 2022. However, a decision on launching a digital euro will only be made after the completion of the ECB trials and the adoption of corresponding legislation.
The use of tokenized securities is rapidly expanding, as seen in the United States, where the market for tokenized U.S. Treasury bonds grew from $114 million to $845 million over the course of last year.
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