Rabobank has completed the first real-time commercial paper transactions using blockchain technology, following a successful two-year pilot in partnership with Commerzbank and Euroclear.
Rabobank Markets executed multiple €1 million, one-week maturity Euro Commercial Paper facilities from Rabobank Treasury in the Netherlands to Dutch asset managers, NN Investment Partners and PGGM, settling instantly as opposed to the standard two business days.
The trade economics and settlement instructions were confirmed and matched in real-time using Corda-permissioned ledger-based application and operational flows delivered by Commerzbank. The security was issued in and settled against cash instantly on the Euroclear Bank’s infrastructure.
Following the successful pilot, the Dutch lender is working to offer the proposition to clients across Europe, says Jacek Wieclawski, head of innovation, Rabobank Markets.
“When co-discussing innovation with our institutional clients, we learned that blockchain technology can boost intraday liquidity for debt securities, meaning our clients can manage their portfolio and liquidity risks in a truly real-time manner," he says. "By leveraging the mix of both blockchain and existing technologies, we managed to create a new market for our clients where public debt securities can be traded and settled instantly while keeping fund managers focused on managing investors’ money in real-time.”