- The central bank of the Federal Republic of Germany successfully tested a settlement interface for electronic securities with distributed ledger technology.
The most influential member of the ESCB, the Deutsche Bundesbank announced today the successful testing of a new banking system running on distributed ledger technology (DLT).
Underlying distributed ledgers is the same technology that is used by Blockchain and Deutsche Bundesbank in this context stated “In doing so, the participants have demonstrated that it is possible to establish a technological bridge between blockchain technology and conventional payment systems to settle securities in central bank money with no need to create central bank digital currency.”
The testing was to take place in the style that the Federal Government’s Finance Agency issued a ten-year Federal bond (Bund) in the DLT system, with all transactions in the primary and secondary markets also settled using DLT.
A member of the Bundesbank Executive Board responsible for the Directorate General Payments and Settlement Systems, also commented on this situation and believes that the Eurosystem will respond and implement such solutions in the short term.
Following successful testing, the Eurosystem should be able to implement such a solution in a relatively short space of time – at least in far less time than it would take to issue central bank digital currency, for instance.Burkhard Balz
Burkhard Balz also thinks that the DLT is much faster for implementation to the system compared to the issuance of the central bank’s own digital currency (CBDC).
Burkhard Balz was joined also by Stephan Leithner, a member of the Executive Board of Deutsche Börse, who claims that new technologies are a key component, but also Jutta Dönges, Co-Chief Executive Officer of the Finance Agency, who said they were pleased that can support the development of this innovative technology.