Today the Boerse Stuttgart Group confirmed the completion of a series of tokenized securities settlement tests as part of the ECB wholesale DLT settlement trials. Six banks were involved with the tests, including Commerzbank, Deutsche Bank, DZ Bank, LBBW, Bankhaus Metzler and V-Bank.
Boerse Stuttgart has a blockchain-based settlement platform to which the banks connected, and in turn the platform was linked to the Deutsche Bundesbank’s trigger solution. This initiates payments on the Target 2 real time gross settlement (RTGS) system. However, these were simulated experiments rather than involving real cash.
Five different tokenized securities were tested, including bonds, funds and a share.
While Boerse Stuttgart is trialing the system on home territory, it’s not planning to use it in a live environment yet. Instead, the settlement solution will be part of BX Digital, the stock exchange’s new Swiss exchange for tokenized securities which it plans to launch this year.
“Blockchain technology is a game changer for the digitalization of the European capital market. We at Boerse Stuttgart Group are pioneers in this field. With the successful completion of the ECB blockchain tests, we have taken an important step in the EU,” said Dr Matthias Voelkel, CEO of Boerse Stuttgart Group.
Germany has supportive laws for the issuance of tokenized securities, but trading and settlement are governed by EU laws. This is where the DLT Pilot Regime comes in. However, incumbents have found the limits within the DLT Pilot Regime too low, so it has mainly attracted startups.
Meanwhile, German institutions continue to be the most active participants in the ECB DLT settlement trials. Additionally, the Bundesbank appears to be expanding its DLT activities by hiring new staff.
