In a truly European issuance, Dutch banks ABN AMRO and Rabobank participated in a digital commercial paper issuance, tokenized on the Deutsche Börse Clearstream D7 DLT. The Luxembourg transaction was settled atomically using a wholesale CBDC issued by the Banque de France.
Stepping back, this transaction is part of the Eurosystem’s DLT trials for wholesale settlement using central bank money. The Banque de France’s wholesale CBDC (wCBDC) is one of three settlement options, with the other options linking more directly to EU payment systems T2S or TIPS. We note that Clearstream referred to the wCBDC as ‘Exploratory Cash Tokens’ (ECTs).
The wCBDC or ECTs use the Banque de France’s DL3S DLT.
ABN AMRO Bank issued the one month €1.1 million commercial paper with Rabobank and ABN AMRO Clearing Bank as investors. Given the paper was provided with an XS ISIN, Clearstream says it qualifies as the first Eurobond settled with digital central bank money.
In July ABN AMRO Clearing Bank partnered with Cboe Clear Europe to explore using the wCBDC as collateral for margin calls. Previously, ABN AMRO has favored public blockchain for its digital bond issuances, using Ethereum, Stellar and Polygon.
In case you’ve missed it, today the ECB has signalled it is considering what will happen after these DLT settlement trials, which end next month. Given ECB Director Piero Cipollone outlined an expansive vision of a European Ledger and a Digital Capital Markets Union today, there’s a good chance these settlement trials will be extended at a minimum. Plus the authorities are exploring the acceptance of DLT-based assets as collateral.
