Eurex Clearing participated in the Eurosystem’s exploratory work on new technologies for wholesale central bank money settlement.
The initiative, led by the European Central Bank (ECB), aims to explore the potential of distributed ledger technology (DLT) in enhancing financial market infrastructures. On 22 and 23 October, a production trial with the DLT system of Banque de France was successfully completed on site at Deutsche Börse Group’s headquarters.
Eurex Clearing successfully tested the settlement of cash over the ledger of Banque de France. These trials involved three other central banks: the German Bundesbank, Dutch De Nederlandsche Bank and Banque Centrale de Luxembourg. ABN Amro Bank, ABN Amro Clearing Bank, Rabobank, Clearstream, and Eurex Repo also participated in this cooperation.
The tests focused on two primary use cases: centrally cleared repo transactions and intraday margin calls. The subject of the tests was a native digital commercial paper, issued on Clearstream’s D7 platform by ABN Amro and traded on the Eurex Repo F7 platform. This marks the first time that Eurex Clearing has managed its own wallet on a Eurosystem´s DLT technology.
These tests clearly demonstrated that the counterparty credit risk remains unchanged regardless of the underlying technology. This finding highlights that the transition to DLT does not inherently alter the risk profile associated with counterparties.
The exploratory work will lay the basis for future industry standards, particularly for interoperability between DLT platforms and traditional finance, in which financial market infrastructures like CCPs will play a crucial role. This initiative highlights the importance of integrating new technologies to support the broader clearing ecosystem, maintaining stability and efficiency in financial markets.
Jens Janka, COO and Member of the Executive Board of Eurex Clearing AG, commented:
“Eurex Clearing is proud to participate, together with Eurex Repo and Clearstream, in the ECB’s exploratory work on new technologies for wholesale central bank money settlement. These initiatives are crucial for advancing the integration of distributed ledger technology in financial market infrastructures. Our collaboration with the clearing community and central banks emphasizes our commitment to innovation and the future of digital finance.”
