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    Home » European Central Bank trial to explore DLT for wholesale transactions
    Fintech

    European Central Bank trial to explore DLT for wholesale transactions

    Sylvia ShenBy Sylvia ShenApril 9, 2024Updated:April 10, 2024No Comments2 Mins Read
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    • The European Central Bank (ECB) has initiated an exploration into the potential application of distributed ledger technology (DLT) for settling wholesale transactions involving central bank money.
    • DLT, serving as the underlying technological framework, enables simultaneous access, validation, and updating of records across a networked database, forming the cornerstone of this endeavor.
    • In the initial phase of testing, a consortium of 10 market participants, six DLT operators, and five central banks will engage in simulated settlement operations and conduct live transactions using central bank currency.

    The European Central Bank (ECB) has assembled a diverse group of participants to explore the potential of distributed ledger technology (DLT) for settling wholesale transactions in central bank money.

    ECB initiates trial of DLT

    DLT, which comprises the technological infrastructure and protocols enabling simultaneous access, validation, and updating of records across a networked database, forms the backbone of this initiative.

    In the initial testing phase, 10 market participants, six DLT operators, and five central banks will engage in simulated settlement operations and conduct real transactions using central bank currency.

    Also read: Bank of America puts banking, investing, retirement into one app

    Clearstream, a division of Deutsche Börse‘s post-trade business, is enhancing its digital post-trade platform with DLT capabilities as part of this collaborative effort.

    Jens Hachmeister, head of issuer services and new digital markets at Clearstream, sees the involvement in ECB trials as a milestone in their digitisation journey, stating, “We are thrilled to further collectively shape the future of an inter-connected digital European settlement landscape together with the ECB and our broad participant base.”

    Also read: Coinme’s new cash-to-crypto feature simplifies crypto transactions

    Trial targets securities settlement

    The trial’s focus lies on examining the securities settlement cycle, which includes delivery-versus-payment, secondary market transactions, and securities lifecycle management.

    Additionally, the trial considers various cross-border payment mechanisms, including payment-versus-payment.

    Clearstream Deutsche Börse DLT ECB Wholesale transactions
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    Sylvia Shen

      Sylvia Shen is an editorial assistant at Blue Tech Wave specialising in Fintech and Blockchain. She graduated from the University of California, Davis. Send tips to s.shen@btw.media.

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