IZNES, the European UCITS fund platform that uses blockchain for record keeping, shared details about experiments during the recent Eurosystem wholesale DLT settlement trials that ended in November. It conducted two sets of experiments that used the Banque de France’s wholesale CBDC (wCBDC) or ‘exploratory cash tokens’.
In both cases Generali took on the role of investor. The first stream involved using the wCBDC to subscribe for a tokenized fund issued by AXA IM. Given AXA IM doesn’t have access to central bank money, BNP Paribas Securities Services dealt with the delivery versus payment (DvP) settlement on its behalf, including the wallet management.
The second stream involved multiple steps. This time there was a tokenized fund from OFI Invest AM with Société Générale handling the settlement. After Generali paid for the investment, the wCBDC was subsequently used by OFI to reinvest in other funds as well as tokenized bonds issued by Société Générale. The tokenized bond, which was subsequently redeemed, used the Société Générale FORGE infrastructure.
There were three platforms involved with a Hash Time Locked Contract (HTLC) providing the interoperability between the Banque de France’s DL3S blockchain (Hyperledger Fabric), the IZNES blockchain (Hyperledger Fabric) and SocGen FORGE’s blockchain platform.
“At Generali, we have leveraged IZNES to manage our fund positions efficiently using blockchain,” said Rémi Cuinat, Director of Unit-linked Assets at Generali. “The success of this experimentation with the Eurosystem and the CeBM (central bank money) demonstrates the transformative potential of blockchain technology in streamlining fund management processes. The introduction of a wholesale CeBM represents a significant step forward for insurers like Generali, simplifying operations and enhancing transparency across the funds ecosystem.”
General, OFI Invest AM and Société Générale Private Banking are amongst the founding investors in IZNES, which was originally launched by SETL.
Banque de France live wCBDC transactions
While the IZNES transactions were simulations, the Banque de France shared details about two live transactions towards the end of the settlement trials. One involved a repo transaction with Société Générale FORGE. The other involved the Slovenia sovereign digital bond issued in July on the BNP Paribas Neobonds blockchain.
The central bank bought some of the Slovenia tokens in the secondary market and tested coupon payments and redemption, both using the exploratory cash tokens for settlement.
Emmanuelle Assouan, Director General Financial Stability and Operations at the Banque de France said that the trial “demonstrates our commitment to exploring all possibilities, especially for investors, for supporting the development of decentralised finance while also preserving financial stability.”
