ECB trial participants process cleared repo transactions on DLT
23 October 2024 Europe
Image: NicoElNino/stock.adobe.com
Clearstream has jointly processed a set of cleared repo transactions using distributed ledger technology (DLT), during the European Central Bank (ECB) trials.
The other firms involved in this venture were ABN Amro Bank, ABN Amro Clearing, Rabobank, Eurex Clearing, and Eurex Repo.
The first set of repos were processed intraday, the second overnight. The basis for the repo transaction was a tokenised eurobond/commercial paper issued earlier this month by ABN Amro Bank.
Clearstream acted as market DLT operator, providing the technical infrastructure with its digital securities platform D7, developed in partnership with Google Cloud.
The processes entirely run on Clearstream’s D7 DLT platform. They include both the issuance of the security itself and the transfer of the assets from the issuer to the investors.
According to Clearstream, the movement of funds using digital central bank money is instructed and orchestrated by D7 DLT. By connecting D7 with Banque de France’s full-DLT interoperability solution DL3S, the cash leg of the repo transaction “reaches the European TARGET2 payment system”.
During the transaction, ABN Amro Bank acted as collateral taker and cash provider, ABN Amro Clearing and Rabobank were collateral providers and cash takers, while Eurex Clearing was the central counterparty and Eurex Repo was providing the trading platform.
Commenting on the announcement, Jens Hachmeister, head of issuer services and new digital markets at Clearstream, says: “Managing a cleared repo as our sixth use case in the ECB trials complements Clearstream’s D7 DLT portfolio perfectly.
“We are thrilled to be working with such strong partners on a stable digital cash solution to advance a competitive digital financial ecosystem in Europe.”
The ECB trials are aimed at exploring the potential of DLT for settling wholesale transactions in central bank money.
The other firms involved in this venture were ABN Amro Bank, ABN Amro Clearing, Rabobank, Eurex Clearing, and Eurex Repo.
The first set of repos were processed intraday, the second overnight. The basis for the repo transaction was a tokenised eurobond/commercial paper issued earlier this month by ABN Amro Bank.
Clearstream acted as market DLT operator, providing the technical infrastructure with its digital securities platform D7, developed in partnership with Google Cloud.
The processes entirely run on Clearstream’s D7 DLT platform. They include both the issuance of the security itself and the transfer of the assets from the issuer to the investors.
According to Clearstream, the movement of funds using digital central bank money is instructed and orchestrated by D7 DLT. By connecting D7 with Banque de France’s full-DLT interoperability solution DL3S, the cash leg of the repo transaction “reaches the European TARGET2 payment system”.
During the transaction, ABN Amro Bank acted as collateral taker and cash provider, ABN Amro Clearing and Rabobank were collateral providers and cash takers, while Eurex Clearing was the central counterparty and Eurex Repo was providing the trading platform.
Commenting on the announcement, Jens Hachmeister, head of issuer services and new digital markets at Clearstream, says: “Managing a cleared repo as our sixth use case in the ECB trials complements Clearstream’s D7 DLT portfolio perfectly.
“We are thrilled to be working with such strong partners on a stable digital cash solution to advance a competitive digital financial ecosystem in Europe.”
The ECB trials are aimed at exploring the potential of DLT for settling wholesale transactions in central bank money.
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