Deutsche Börse launches DLT-ready post-trade platform – Ledger Insights


Today, the German exchange Deutsche Börse announced its intention to launch its digital post-trade platform D7 in November. The gradual roll-out begins with a new central digital register for securities. By mid-2022, it plans to support same-day digital title issuance. A third phase consists of integrating with blockchain platforms and enabling delivery against payment.

The launch follows recent changes in German law (eWpG), creating the concept of an electronic security that does not require a conventional share certificate. The goal of the DLT compatible platform is to provide straight-through processing.

“With D7, we are providing the financial community with a next-generation digital securities post-trade platform to unlock the potential of truly digital and decentralized finance,” said Stephan Leithner, Member of the Board of Directors of Deutsche Börse.

“It’s time not only to digitize unique processes; It’s time to completely reinvent post-trade for a stronger, more sustainable and digital future of the securities markets.

Several large banks have been involved in the development, including BNP Paribas, Citi, DekaBank, Deutsche Bank, dwpbank, DZ Bank, Goldman Sachs, Raiffeisen Bank International and Vontobel.

Technology partners include Digital Asset and Microsoft, and R3 and VMware on the blockchain side.

“Many Deutsche Börse members are already Corda users, so joining the D7 infrastructure essentially expands their current Corda capabilities,” said Charley Cooper, Managing Director of R3. “Corda was designed to be robust, scalable and interoperable, so that it de facto becomes the standard ledger of choice for regulated institutions. “

A step-by-step approach

Deutsche Börse owns Eurostream Banking which operates a central securities depository (CSD) in Frankfurt and an international CSD in Luxembourg. Eurostream Banking will launch the new digital central ledger in November, which connects to the Target-2 Securities infrastructure for settlement.

Digital Asset is the technological partner of the registry, which is built using a centralized database.

From mid-2022, D7 will support digital broadcast, enabling straight-through processing and removing the need for reconciliation.

“Digital Asset is at the center of this transformation, working with market infrastructures around the world to realize a digital future,” said Jens Hachmeister, Managing Director, Issuer Services and New Digital Markets, Deutsche Börse. “It is with technology partners, such as Digital Asset and others, that we can predict that more than 80% of German securities will be digitized via D7 by mid-2022, promoting the digitization of the German and European financial markets. . “

And after that, it is planned to integrate into HQLAX the digital collateral register in which Deutsche Börse is a partner and investor and another investor, the Luxembourg fund distribution platform FundsDLT.

At this point, the solution will use Digital Asset’s DAML smart contract language and its blockchain interoperability solution.

Initially, D7 focused on digital securities. However, there are plans to support other digital assets and cryptocurrencies in the future. It also intends to integrate other payment solutions.

In April, Deutsche Börse and Commerzbank announced a new Frankfurt-based 360x digital asset business that seeks to symbolize art and real estate. Two months later, the exchange group spent more than 100 million Swiss francs ($ 108 million) to acquire Swiss digital asset brokerage and trading company Crypto Finance. He also recently conducted experiments to use DLT for derivatives.

Updates: the content has been substantially rewritten

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