Deutsche Börse’s Clearstream D7 Achieves Milestone of Over €10 Billion in Digital Securities

Deutsche Börse’s Clearstream, a key player in post-trade services, has made a significant leap in the realm of digital securities with its D7 platform surpassing the €10 billion mark in issuances. This milestone, which stands at more than €11 billion, underscores the growing traction of digital assets in the financial landscape.

The D7 platform has predominantly been instrumental in facilitating two primary types of issuances: large digital bonds and structured products. Notably, state-owned institution KfW has leveraged D7 for substantial bond issuances, including a €4 billion three-year bond that was later upsized to €5 billion, along with a recent €3 billion bond over a seven-year period. These initiatives have collectively contributed €8 billion to the platform, with KfW’s pioneering €20 million bond issuance in 2022 marking a significant beginning.

On the other end of the spectrum, D7 has been pivotal in issuing approximately 15,000 structured products monthly, totaling around 250,000 products. These bespoke securities, akin to derivatives, have seen a cumulative volume of around €3.5 billion by mid-June. While some may question the blockchain nature of these securities due to their issuance via a centralized registry, it aligns with prevailing practices globally, such as those observed on the SIX Digital Exchange (SDX).

Technically, the D7 platform harnesses DAML smart contracts, incorporating the Canton blockchain in its latest iteration. Despite the centralized registry, the securities are inherently blockchain-based, emphasizing the significance of smart contracts in enhancing automation and operational efficiencies.

The European Central Bank (ECB) has taken note of these efficiencies, initiating DLT wholesale settlement trials. Noteworthy simulations involving D7 include a centrally cleared intraday repo transaction and a €50 million commercial paper issuance, showcasing the platform’s real-world applicability. Clearstream’s active involvement in these trials, including the utilization of French wholesale CBDC for settlement, underscores its commitment to advancing digital financial ecosystems in Europe.

As ECB Director Piero Cipollone contemplates building on these trials for future developments, the success of D7 in hosting decentralized bond issuances during the ECB trials signals a promising trajectory for Clearstream and the broader digital securities landscape. Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream, emphasizes the need for a seamless transition from trial infrastructure to a sustainable solution to foster a competitive digital financial ecosystem in Europe.

The achievement of surpassing €10 billion in digital securities issuance cements Clearstream’s position as a key player in the digital assets space, heralding a new era of innovation and efficiency in the financial markets.