The second-largest exchange in Germany, Börse Stuttgart Group and the European Central Bank (ECB), aims to revolutionize securities transactions by reducing settlement time.
This development represents the group’s inaugural “settlement of exchange transactions with blockchain-based securities against central bank money,” according to a press release made available to Cointelegraph.
“The settlement solution was linked to the Deutsche Bundesbank’s trigger solution and thus to the traditional euro payment system.“
Settlement using tokenized securities
The ECB conducted the test to investigate blockchain technology, which involved six partner banks: Commerzbank, Deutsche Bank, DZ Bank, LBBW, Bankhaus Metzler, and V-Bank.
By employing the blockchain-based settlement solution of Boerse Stuttgart Group, the institutions conducted a series of transactions that involved five tokenized securities, including bonds, funds, and shares.
The settlement time was reduced from two days to just a few minutes by concentrating on “the interoperability of blockchain and central bank money.”
“The tests showed that the settlement processes can be mapped automatically, step by step and directly between the trading participants – efficiently, securely and without counterparty risk.”
Implications to the Digital Market
The pilot project investigated individual cases and multiple transaction scenarios to comprehensively evaluate blockchain technology’s potential implications in real-world market conditions.
To comprehensively comprehend the dependability of blockchain integration in digital markets, the evaluations replicated typical operational environments and exceptional scenarios.
EUWAX AG, a German broker, contributed to the test findings, the ECB’s endeavor to evaluate blockchain applications in capital market transactions, and Boerse Stuttgart’s crypto custody service.
Integration with DZ Bank
On September 19, DZ Bank partnered with Boerse Stuttgart Digital Group to incorporate the group’s regulatory infrastructure and technical components into the bank’s new crypto services.
Boerse Stuttgart Digital assisted in the facilitation of DZ Bank’s operational components. There are plans to connect the initial institutions by the conclusion of 2024.
The collaboration will allow approximately 700 cooperating institutions under DZ Bank’s umbrella to offer digital asset access to retail customers.
