German securities marketplace Deutsche Boerse and Swiss state-run telecom Swisscom have settled securities transactions using different blockchain protocols. In a joint proof-of-concept (PoC) involving a number of banks, the participants exchanged money in the form of cash tokens against tokenized shares, Deutsche Börse officially announced on Nov. 19.
Based on blockchain technology, the joint PoC intends to show the potential of new technologies in the financial services sector and maintain Germany and Switzerland’s expertise in the digital asset ecosystem.
Three major Swiss banks participated in the PoC
The PoC involved major Swiss banks, including the fourth-largest Swiss bank Zuercher Kantonalbank, investment bank Vontobel and Falcon Private Bank. These banks were acting as counterparties and exchanged securities tokens against cash tokens, the press release notes.
The central bank of Switzerland, the Swiss National Bank, also indirectly participated in the PoC as the cash tokens were deposited as collateral in Eurex Clearing’s account in the bank. The cash tokens in Swiss francs were provided by Deutsche Boerse.
Corda and Hyperledger were used for cross-chain secure settlement
In order to process cash and security tokens, the participants were deploying two different distributed ledger technology (DLT) protocols — R3’s Corda and IBM’s Hyperledger Fabric — to complete cross-chain secure settlement.
Other participants of the PoC included Swiss blockchain firm daura and Custodigit, a joint custodial venture by Swisscom and Sygnum. The firms provided core elements of the digital share registry for the PoC, Deutsche Börse noted.
The new initiative by Deutsche Borse and Swisscom is another milestone in the existing blockchain-related collaboration of the companies. Earlier this year, Deutsche Borse Group and Swisscom partnered with Singapore-based fintech firm Sygnum to develop compliant financial market infrastructure for digital assets.