Yesterday the European Central Bank shared the list of the first institutions to participate in the wholesale DLT trials using central bank money for settlement. The participants include ten institutions, six market DLT operators and five central banks. Applications are still open for the second wave.
Last December the ECB launched its first call for participants. The trials will involve real transactions as well as mock simulations, with most of the tests focusing on securities settlement. The EuroSystem also plans to consider use cases for payment versus payment (FX) and cross border payment.
Three settlement solutions are part of the trials, provided by the central banks of Germany (Trigger solution), France (wholesale CBDC) and Italy (TIPS Hashlink). The Oesterreichische National Bank is also participating as a DLT operator, plus the Bank of Luxembourg is involved.
German institutions well represented
Of the ten market participants, seven are German, including the local JP Morgan subsidiary. One is from France (BNP Paribas) and two are from Luxembourg (European Investment Bank and Spuerkeess). The other seven German institutions are B Metzler, DekaBank, Deutsche Bank, DZ Bank, Deutsche Börse’s Eurex Clearing, and Landesbank Baden-Württemberg (LBBW).
The ECB didn’t share how many applications it received. Given the dominant German presence, this could favor the adoption of the Bundesbank’s Trigger payment solution. In-person meetings could be useful for the first wave of trials.
Three market participants are also operating market DLT solutions. They are LBBW, DekaBank and BNP Paribas. Deutsche Börse has three Clearstream Banking subsidiaries participating from Germany and Luxembourg as well as Clearstream owned LuxCSD. We believe the six DLT operators represent three DLT platforms: BNP Paribas’ AssetFoundry, SWIAT (DekaBank, LBBW) and Clearstream’s D7.
We’ve covered many of the ECB’s wholesale DLT discussions in the run-up to these trials.
Update: Added additional detail re the DLT platforms.
