Deutsche Bundesbank and Deutsche Börse See Successful Blockchain Securities Settlement Pilot


The central bank of Germany, Deutsche Bundesbank, and the owner of the Frankfurt Stock Exchange, Deutsche Börse, have a mutual interest in common – blockchain technology. Based on a press release on October 25th, the two entities have finished a trial that was investigating how helpful the tech could be in securities settlement.

Luckily, the trial was a success. Each of the companies used blockchain prototypes that were built to their specific needs. As the trial finished, the prototypes were able to support settlements involving securities transactions, payments, and bond repayments at maturity. However, the writers of the report were clear that some of the technology was changed during the trial, which may have caused the results to be outdated.

This is great news, considering that the original project was started in March 2016 as the twosome launched the BLOCKBASTER project. The goal was to develop “a conceptual prototype” that would let a blockchain-based system handle the transfers and settlements of both fiat currency and securities. During creation, the prototypes used Hyperledger Fabric to work upon, building them on a blockchain platform that Digital Asset (DA) created. DA has also been involved with the Australian Securities Exchange, working to broaden their network beyond the CHESS system by 2020.

Based on the press release, the prototypes managed to smooth out the “productive operation of a realistic financial market infrastructure.” There were still some weaknesses, like the high amount of power required from CPUs to support the prototypes. However, if each of the blockchain platforms implement the recent upgrades, the performance could be even greater.

The CEO of Clearstream Banking and head of Clearstream Global Operations at Deutsche Börse Group, Berthold Kracke, commented,

“The tests have shown that blockchain technology is a suitable basis for applications in the field of settlement and other financial infrastructures.”

One of the members of Deutsche Bundesbank’s executive board, Burkhard Balz, commented that both firms are expecting that the development will continue to make fast progress, potentially helping with applications that have higher traffic volume. He added,

“The approach of a permissioned architecture, which takes into account the requirements of the financial sector from the outset, has proven to be right.”

Blockchain technology has been growing for quite some time. Though the financial industry around the world has been hesitant to accept cryptocurrency, the tech behind this ledger is helpful in improving payment and settlement systems. Multiple countries have been pursuing blockchain trials, so it is clear that this support could be here for good, with the right integration.

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