Deutsche Börse Group has developed a concept for riskless transfer of
commercial bank money via an infrastructure based on distributed ledger
technology (DLT). By combining blockchain technology with its proven
post-trade infrastructure, Deutsche Börse aims to achieve efficiencies while at the
same time investigating possible new business opportunities enabled by this
DLT is often perceived as a disruptive technology and currently there is a
lot of debate about the potential it offers for the financial industry. Its
decentralised character allows for direct interaction between participants
giving it the potential to simplify complex processes. Established market
infrastructure providers such as Deutsche Börse, who services the whole
value chain from one source, play an important role when it comes to exploiting
this potential while at the same time fulfilling industry standards. These
include legal and regulatory provisions, security standards, risk management as
well as cost efficiency aspects.
Via collateralisation at Deutsche Börse Group’s central counter party
(CCP), Eurex Clearing, credit risk inherent in tokenised coins can be mitigated.
As Eurex Clearing interfaces with the Group’s central securities depository
Clearstream, the new concept might also offer the potential for efficiency
gains in post-trade processes like settlement and asset servicing.
As a next step, Deutsche Börse will consult with clients, regulators and
central banks to obtain feedback on its concept. A functional and technical
prototype based on Hyperledger Fabric is currently being developed, a
patent application has been filed.
“Developing and launching new cutting-edge offerings is core for Deutsche
Börse,” said Carsten Kengeter, CEO of Deutsche Börse AG. “Distributed
ledger technology has remarkable potential. With this pilot, we are adding another
pioneering element in the area of payments and value transfer to the debate
around blockchain. We look forward to further consulting with clients,
regulators and central banks on our project.”
“Our innovative concept can be the basis for a variety of use cases, among
them credit risk free cash transfers and the value transfer of assets on the
blockchain,” explained Eric Müller, CEO of Eurex Clearing, Deutsche Börse’s
clearing house. “Through the involvement of our CCP as trusted third party,
a clear set of rules and governance would be ensured.”
The concept is based on a collateralised coin, “CollCo”. All peer-to-peer
payments based on tokenised commercial bank money are accompanied by
movements of collateral between the respective Eurex Clearing members using the CCP’s
functionality and rules.
CollCo addresses existing and potential new use cases. These include the
handling of margining requirements, credit risk free payments, and
delivery-versus-payment asset/value transfer on the blockchain.