Boerse Stuttgart says it has tested the settlement of exchange transactions with blockchain-based securities against central bank money - finding that using the technology can reduce settlement times from days to minutes.
The exchange operator carried out trials with six banks and the Bundesbank as part of the ECB's wholesale blockchain settlement trials.
Commerzbank, Deutsche Bank, DZ Bank, LBBW, Bankhaus Metzler and V-Bank were connected to Boerse Stuttgart's blockchain-based settlement solution as trading and settlement participants. The system was also linked to the Deutsche Bundesbank's trigger solution and thus to the traditional euro payment system.
The partners tested a large number of transactions with five tokenised securities - including bonds, funds, and a share. The focus was on the interoperability of blockchain and central bank money.
Boerse Stuttgart says the tests showed that the settlement processes can be mapped automatically, step by step and directly between the trading participants - efficiently, securely and without counterparty risk. The settlement time was reduced from two days to just a few minutes.
“Blockchain technology is a game changer for the digitalization of the European capital market. We at Boerse Stuttgart Group are pioneers in this field. With the successful completion of the ECB blockchain tests, we have taken an important step in the EU," says Matthias Voelkel, CEO, Boerse Stuttgart.