Deutsche Bundesbank and Deutsche Börse have unveiled a new functional prototype for the blockchain technology-based settlement of securities.

The new solution 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 transfer of digital coins or digital securities alone. It is also capable of settling basic corporate actions such as coupon payments on securities and the redemption of maturing securities.

The two banks plan to develop the prototype further in the coming months, with a view for the product to be used to analyse the technical performance and the scalability of this kind of blockchain-based application.

Carl-Ludwig Thiele, member of the Deutsche Bundesbank, commented: “With the blockchain prototype, the Deutsche Bundesbank and Deutsche Börse want to work together to find out whether this technology can be used for financial transactions, and if so, how this can be achieved. The Deutsche Bundesbank hopes that this prototype will contribute to a better practical understanding of blockchain technology in order to assess its potential.”

Carsten Kengeter, CEO of Deutsche Börse, added: “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.”

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