Deutsche Bundesbank and Deutsche Börse have announced a joint “conceptual study” into the viability of blockchain technology for financial transactions. First stage in the study was the development of a functional prototype for the blockchain technology-based settlement of securities. This is “designed to provide the technical functionality for the settlement of securities in delivery-versus-payment mode for centrally issued digital coins, as well as the pure transfer of either digital coins or digital securities alone”.
The prototype is also capable of settling basic corporate actions such as coupon payments on securities and the redemption of maturing securities. It will be developed further “over the next few months” (from the end-November 2016 announcement) and then used “to analyse the technical performance and the scalability of this kind of blockchain-based application”. Carsten Kengeter, CEO, Deutsche Börse AG, says: “Along with the Deutsche Bundesbank we are innovatively and creatively addressing potentially radical technological opportunities for the financial sector. We will continue to do our utmost to leverage blockchain’s efficiency potential and to better understand and minimise the associated risks of this technology.”