TodayĀ ClearstreamĀ announced thatĀ LBBWĀ andĀ VontobelĀ have issued digital securities on theĀ Deutsche Bƶrse D7 platform. Clearstream is Deutsche Bƶrseās post-trade service provider, and D7 is its new digital post-trade platform.
In mid-2021, Germany passed its eWpG legislation supporting digitally native electronic securities. Under the law, securities registration can either be central or decentralized using blockchain. Todayās issuances are centrally registered securities, following theĀ launch of D7Ā last year, which started by providing a digital central securities depositary. Thatās because existing securities can be digitally represented.
The orchestration uses the DAML smart contract language, even though blockchain is not yet supported. Clearstream said that ādigital instruments are smart objects that represent electronic securitiesā. They have all the necessary data for automation, enabling straight-through processing. In turn, this should minimize the need for reconciliations.
āThis moves issuance of structured products from days to minutes,ā said Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream. āWe are accelerating time to market and unlocking an entire new universe of product opportunities as we continue to venture towards fully digitised markets.āĀ
Digital instruments are not specific to particular technologies or asset classes. In these examples, LBBW issued a bonus certificate and Vontobel a structured security.
āIn addition to a highly automated trading process, a digitalised and efficient issuance and settlement process is of great importance for the retail-certificate business,ā said Jan Krüger, Head of Equity Markets at LBBW.
The next step for D7 is DeNet, which will support blockchain-based securities. So far, the Deutsche Borse is working with VMWare Blockchain and š„R3ās Corda enterprise blockchainš„ but also anticipates public blockchains. The first blockchain supported digital securities are likely to be for networks in which Clearstream has invested. Those includeĀ HQLAįµ”, the digital collateral and securities platform, and tokenized fund networkĀ FundsDLT.