In February 2017, Deutsche Bundesbank was working on a blockchain-based settlement system which according to the institution was not yet market ready. In partnership with Deutsche Börse, the organization developed a preliminary prototype for a blockchain-based solution for payment settlement, transferring securities, processing delivery-versus-payment transactions in which securities purchases are settled and payment is made simultaneously and processing basic corporate actions, including coupon payments on bonds and redeeming maturing securities.
Germany’s Central bank Deutsche Bundesbank and Deutsche Börse have announced the successful completion of a performance test for two prototype blockchain-based securities settlement systems which they developed jointly. It was revealed that the prototype systems support the settlement of regular payments, interest payments, securities transactions and repayment when bonds achieve maturity. The announcement further revealed that the systems were developed on Hyperledger Fabric version 1.0 and the Digital Asset platform.
Burkhard Balz, Member of the Executive Board of Deutsche Bundesbank spoke about the test results:
“During this project, Deutsche Bundesbank and Deutsche Börse learned a lot about the usage of this technology and its concrete implementation. We expect the rapid development to continue, and also see the potential in using it for high-volume applications. The approach of a permission architecture, which takes into account the requirements of the financial sector from the outset, has proven to be right.”
In his own reaction, Berthold Kracke, CEO of Clearstream Banking AG and Head of Clearstream Global Operations at Deutsche Börse Group, said:
“We are very happy with the results of the project. The tests have shown that blockchain technology is a suitable basis for applications in the field of settlement and other financial infrastructures. Thanks to the cooperation with Deutsche Bundesbank and the expertise of Digital Asset, we were able to tailor the product to the needs of the industry.”