Last month the Eurosystem wholesale DLT settlement trials using central bank money ended. The European Central Bank (ECB) said it will discuss the lessons learned with participants in January and will consider next steps. Some participants hoped for an extension of the trials to maintain momentum. Switzerland’s wholesale CBDC pilot was extended by two years shortly before it ended.
According to the ECB there were more than 200 transactions with a total value of €1.59 billion. Sixty four institutions took part in over 40 trials and experiments. Trials involved real money, whereas experiments were simulations.
The trials mainly involved the issuance and redemption of bonds and commercial paper as well as intraday repurchase agreements (repos).
A quick analysis of our data shows 21 issuances, of which six were commercial paper and the rest were various types of digital bonds. The combined value was more than €831 million, although five of the issuers did not share the amount. In our experience, that often means they are less than €5 million. The largest issuance by far was the €300 million bond from Siemens. Four were for €100 million, including two European Investment Bank (EIB) bonds towards the end of the trial period.
German institutions dominated the trials, so the Bundesbank’s Trigger solution was the most widely used of the three different central bank settlement options. Of the 21 live issuances, two used Italy’s TIPS Hashlink solution, five used the Banque de France’s wholesale CBDC or “exploratory cash tokens” and the remaining 14 used the Trigger solution that links to the TARGET2 payment system.
The simulations tested a wider array of use cases, including interbank settlement for tokenized deposit payments, automated swaps settlement, margin call payments and the settlement of interbank balances after reconciliation, amongst others.
We covered many of the trials here.
