Clearstream joins the ECB’s wholesale CBCC experiments with tokenized securities

Central securities depository (CSD) Clearstream, a subsidiary of the Deutsche Börse Group, is participating in the European Central Bank's (ECB) digital euro mass central bank digital currency (CBDC) trials.

Clearstream, which operates the D7 post-trade platform, is the only CSD participating in the first phase of the ECB's “preparation” tests. It, in turn, operates the German CSD, the LuxCSD in Luxembourg and the international CSD. Jens Hachmeister, Clearstream's head of provider services and new digital markets, said in a statement:

“We are expanding the D7 Digital Securities infrastructure with DLT. [distributed edger technology] Establishing and developing connections with the main digital payment solutions in the Eurosystem.

Clearstream has worked with Google Cloud to expand the capabilities of the D7. It examines the integration of distributed ledger technology for wholesale transactions in tokenized securities and 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.

Related: ECB should have mass DLT settlement when market demands it, official says

According to the statement, Clearstream processes euro-denominated offers and delivery-to-pay (DvP) transactions across a range of use cases and payment models. Exams are scheduled from May to November this year and will use real central bank money.

The ECB launched the preparatory phase of its digital euro research in October, following a two-year investigation phase. He made a sales call in January.

Banca d'Italia and Deutsche Bundesbank start working with the same DLT technology in 2021. In late 2023, Banca d'Italia signed a memorandum of understanding with the Bank of Korea to explore settlement systems and CBDC.

Clearstream has over €18 trillion of assets under custody. In the year Participated in SWIFT trials with CBCC and tokenized assets in 2022. No decision will be made to launch the digital euro until the ECB tests are completed and the corresponding legislation is approved.

The use of tokenized securities is expanding rapidly. In the United States, the tokenized US Treasury bond market grew from $114 million to $845 million over the course of last year.

Magazine: Are CBDCs kryptonite for crypto?