The Deutsche Bundesbank and Deutsche Börse have jointly launched a functional prototype for the blockchain technology-based settlement of securities.
The prototype is designed to provide the technical functionality for the settlement of securities in delivery-versus-payment mode for centrally-issued digital coins, as well as the pure transfer of either digital coins or digital securities alone.
In addition, it is capable of settling basic corporate actions such as coupon payments on securities and the redemption of maturing securities.
The Deutsche Bundesbank and Deutsche Börse plan to develop the prototype further over the next few months, and this product will then be used to analyse the technical performance and the scalability of this kind of blockchain-based application.
"With the blockchain prototype, the Deutsche Bundesbank and Deutsche Börse want to work together to find out whether this technology can be used for financial transactions, and if so, how this can be achieved. The Deutsche Bundesbank hopes that this prototype will contribute to a better practical understanding of blockchain technology in order to assess its potential," says Carl-Ludwig Thiele, member of the Deutsche Bundesbank's executive board.
"Along with the Deutsche Bundesbank we are innovatively and creatively addressing potentially radical technological opportunities for the financial sector. We will continue to do our utmost to leverage blockchain's efficiency potential and to better understand and minimise the associated risks of this technology," adds Carsten Kengeter (pictured), CEO of Deutsche Börse.
The blockchain-based prototype is the first result of a collaborative research project between Deutsche Börse and the Deutsche Bundesbank. The prototype is purely a conceptual study. The two institutions will continue to work on improving the prototype and drawing up a test concept.
