Deutsche Börse’s Clearstream Achieves Milestone with Over €10 Billion in Digital Securities Issuance

Deutsche Börse’s Clearstream recently made a significant announcement regarding its D7 digital securities platform, revealing that it has surpassed the €10 billion mark in issuances, a figure that is believed to exceed €11 billion. This achievement underscores the platform’s growing influence and adoption in the digital securities market.

The D7 platform has primarily facilitated two main types of issuances, including large digital bonds and structured products. Notably, the state-owned KfW has been a prominent player in this space, launching several substantial digital bonds through the platform. For instance, KfW issued a €4 billion three-year bond in June, which was later increased to €5 billion in September. Furthermore, Clearstream disclosed the issuance of another KfW bond amounting to €3 billion over seven years, bringing the total to an impressive €8 billion in just two transactions. In a groundbreaking move in 2022, KfW issued the first-ever D7 digital bond worth €20 million.

On the other end of the spectrum, D7 has been instrumental in the issuance of approximately 15,000 structured products monthly, totaling around 250,000 products. These products are essentially custom derivative-like securities tailored to specific requirements. By mid-June, the cumulative volume of these structured products had reached around €3.5 billion.

While some may argue that these securities are not strictly blockchain-based due to Germany’s electronic securities law distinguishing between centralized and decentralized registries, it is essential to note that most D7 issuances have been conducted via a centralized registry. This practice aligns with the issuance of digital bonds on various blockchain platforms globally, where central securities depositories play a crucial role in the process.

Technically, the D7 platform leverages DAML smart contracts, with the latest version incorporating the Canton blockchain. This integration signifies that the securities issued through D7 are blockchain-based, despite the centralized nature of the platform. The emphasis lies not only on the underlying ledger technology but also on the automation and operational efficiencies enabled by smart contracts.

The success and efficiency demonstrated by the D7 platform have garnered the attention of the European Central Bank (ECB), leading to the initiation of DLT wholesale settlement trials. These trials involved various real-world scenarios, including intraday repo transactions and commercial paper issuances, showcasing the platform’s capabilities in facilitating seamless and secure transactions.

In a bid to advance the digital financial ecosystem in Europe, Clearstream has actively participated in these trials, advocating for a smooth transition of the trial infrastructure into a sustainable long-term solution. The positive outcomes of the ECB trials have laid the foundation for potential future developments, as highlighted by ECB Director Piero Cipollone’s recent statements on exploring further opportunities based on the trial outcomes.

Deutsche Börse’s Clearstream’s achievement of surpassing €10 billion in digital securities issuance underscores its pivotal role in shaping the digital securities landscape and driving innovation within the financial industry.