Clearstream has joined the European Central Bank’s test of a digital euro.
Deutsche Börse’s post-trade business will examine how distributed ledger technology could be applied to a central bank digital currency through its D7 digital issuance platform,
Clearstream said new digital ledger capabilities developed in partnership with Google Cloud were introduced to the platform for the test.
“We are expanding our D7 digital securities infrastructure with [digital ledger technology] components and fostering connections with the main digital payment solutions across the Eurosystem,” said Jens Hachmeister, head of issuer services and new digital markets at Clearstream.
Deutsche Börse signed a 10-year deal with Google in 2023, selecting it as the cloud provider of choice for the business. The exchange group used D7 to issue a bond to help finance its acquisition of Simcorp last year.
The trial for the wholesale central bank digital currency — a digital currency for large bank transactions — will run between May and November using central bank money. During the test, Clearstream will connect with the Budesbank, Banca d’Italia’ and Banque de France — the three national central banks participating in the digital euro trial.
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Central banks globally have been looking at developing digital versions of their currencies as the use of physical cash dwindles.
There are now 36 CBDC projects in the pilot phase, according to the Washington-based think-tank, the Atlantic Council, with another 30 in development.
Switzerland began testing its CBDC in December. Digital bonds issued on SIX Digital Exchange were settled using digital swiss francs set up by the Swiss National Bank.
The UK’s digital pound project is currently in the development phase. However, unlike the ECB, the Bank of England has been focusing on a “retail” digital pound aimed at everyday spending.
The digital pound project has faced scepticism. A December report from the Treasury Committee said it was unclear whether the benefits outweigh the risks of introducing a UK CBDC.
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