Clearstream Joins ECB Trials to Explore DLT for Wholesale CBDC Settlement

The European Central Bank (ECB) has initiated trials to explore the potential of distributed ledger technology (DLT) for wholesale central bank money settlement, and Clearstream, a subsidiary of Deutsche Börse Group, is at the forefront of these transformative experiments. Clearstream’s participation in these trials signifies a significant step forward in the digitization journey of the financial industry, particularly in the realm of securities settlement.

Clearstream stands out as the sole central securities depository (CSD) participating in the first wave of the ECB trials, demonstrating its commitment to embracing innovative solutions for post-trade processes. Leveraging its digital post-trade platform D7, Clearstream aims to assess the feasibility of using DLT for wholesale transaction processing, with a focus on tokenized securities.

The trials, scheduled from May to November 2024, will utilize real central bank money to conduct tests across various use cases and payment models. Clearstream’s engagement in these trials underscores its dedication to shaping the future of a digital European settlement landscape in collaboration with the ECB and other key stakeholders.

The enhanced capabilities of Clearstream’s D7 platform, incorporating DLT components in collaboration with Google Cloud, position it as a leading player in the exploration of innovative settlement solutions. With over 25,000 digital securities issuances, Clearstream’s D7 has already established itself as a trusted infrastructure provider in the digital asset space.

Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream, emphasizes the significance of Clearstream’s participation in the ECB trials, highlighting the expansion of D7’s infrastructure and the establishment of connections with major digital payment solutions across the Eurosystem. This collaborative effort reflects Clearstream’s commitment to driving digital transformation and fostering a more interconnected financial ecosystem.

The ECB trials involve three distinct approaches to using central bank money for settlement, with Clearstream planning to leverage all of them to execute various delivery versus payment (DvP) use cases. By connecting to central bank digital offerings such as Bundesbank’s Trigger Solution, Banca d’Italia’s TIPS Hash-link, and Banque de France’s Full DLT Interoperability, Clearstream aims to facilitate seamless settlement processes within the Eurosystem.

Clearstream’s extensive experience and expertise in the financial industry, coupled with its innovative approach to leveraging DLT for wholesale CBDC settlement, position it as a key player in shaping the future of digital finance in Europe. As the trials progress, Clearstream will continue to collaborate with the ECB and its broad participant base to drive innovation and enhance the efficiency of wholesale settlement processes.