Deutsche Bundesbank and Deutsche Börse successfully complete blockchain trial for securities settlement

Deutsche Bundesbank and Deutsche Börse have announced that their jointly specified blockchain prototypes support the settlement of securities transactions, payments, interest payments and repayments at the maturity of a bond.

Developed on Hyperledger Fabric (version 1.0) and the Digital Asset Platform, the prototypes were subjected to performance tests.

According to the official release, the tests demonstrated the suitability of both prototypes for the productive operation of a realistic financial market infrastructure.

“Both the Digital Asset Platform and the Hyperledger Fabric have had subsequent releases which may even improve the performance,” it added.

Deutsche Bundesbank and Deutsche Börse have jointly released a report on the project “Blockbaster.” They started the project back in 2016 to undertake blockchain based settlement technology research.

The report states that the objective was to develop a “conceptual prototype” for a blockchain-based transfer and settlement of securities and cash in order to better understand the functioning of blockchain and related technologies and assess various aspects of the technology such as security, reliability, efficiency, and suitability for financial transactions.

“The Prototype was intended to function as a sandbox for testing Blockchain-based securities settlement including the full lifecycle of bond issuance, settlement, corporate actions, redemption as well as cash transfer including provisioning of digital coins, transfer between market participants and settlement of cash payments,” it said.

“The project was purely for research purposes and was not intended to produce an operational system.”

Burkhard Balz, Member of the Executive Board of Deutsche Bundesbank, said that the project helped them learn a lot about the usage of blockchain technology and its concrete implementation.

“We expect the rapid development to continue, and also see the potential in using it for high-volume applications. The approach of a permissioned architecture, which takes into account the requirements of the financial sector from the outset, has proven to be right,” Balz added.