TokinThree major German companies, Commerzbank, Deutsche Börse, and MEAG have completed the settlement of a legally binding secondary market securities transaction using digital tokens, thus proving a potential of blockchain in post-trade services.
The transaction was achieved through distributed ledger technology (DLT), according to an announcement by Deutsche Börse, which further noted that the digital tokens in the transaction were generated using both commercial bank money and securities tokens.
The prototype scenario reflected a delivery-versus-payment transaction and the transfer of tokenized cash, which aims at exploring the potential of different services that leverage distributed ledger technology.
As part of operative risk management, Commerzbank offered the tokenized cash credits for coverage of margin requirements at Deutsche Boerse-owned exchange, Eurex Clearing as Central Counterparty.
Following the partnership, Eurex Clearing played a part as the tokenizer of cash, and MEAG as the buyer of securities, while Commerzbank acted as the seller and custodian of the securities tokens.
The Head of New Markets at Deutsche Börse Group, Jens Hachmeister, comments:
This is an important joint effort in further exploring the potential of distributed ledger technology for the financial services industry. By combining multiple use cases within these transactions, we have broadened the scope of applications where the market can benefit from possible standards in this new technology. Our goal is to foster our role as financial infrastructure provider of choice.
While the effort initially launched as a test, Deutsche Börse noted that the concept of the transaction today has been shared with regulatory and oversight authorities, while other introduction remains subject to the approval and regulatory compliance of the regulators.
The partners revealed plans to further develop financial markets infrastructure and services for the future.
Announcing another use case of blockchain, Coinfomania reported on October 17 that the Singapore branch of CIMB Bank Berhad completed its first structured trade financing transaction using blockchain technology, together with iTrust’s Internet of Things (IoT) platform.