Boerse Stuttgart Group, the second-largest exchange in Germany, has completed testing of secondary market transactions using blockchain technology in cooperation with the European Central Bank (ECB).

Per a press release shared with Cointelegraph, this development marks the group’s first “settlement of exchange transactions with blockchain-based securities against central bank money.” 

“The settlement solution was linked to the Deutsche Bundesbank's trigger solution and thus to the traditional euro payment system.“

Settlement with tokenized securities

The test was conducted as part of the ECB’s exploration into blockchain tech and involved six partner banks, including Commerzbank, Deutsche Bank, DZ Bank, LBBW, Bankhaus Metzler, and V-Bank.

Using Boerse Stuttgart Group’s blockchain-based settlement solution, the institutions tested various transactions involving five tokenized securities, such as bonds, funds, and shares.

Focused on “the interoperability of blockchain and central bank money,” the settlement time was reduced “from two days to just a few minutes.”

“The tests showed that the  settlement processes can be mapped automatically, step by step and directly between  the trading participants – efficiently, securely and without counterparty risk.”

Digital market implications

The pilot project explored individual cases and multiple transaction scenarios to allow for a broad assessment of blockchain tech implications in real-world market conditions.

The tests simulated normal operational environments, including exceptional cases, to provide a well-rounded understanding of the reliability of blockchain integration in digital markets.

In addition to Boerse Stuttgart’s crypto custody service, EUWAX AG, a German broker, contributed to the test findings and the ECB’s effort to assess blockchain applications in capital market transactions.

DZ Bank integration

On Sept. 19, DZ Bank partnered with Boerse Stuttgart Digital Group to integrate the group’s regulatory infrastructure and technical elements for the bank’s new crypto services.

Boerse Stuttgart Digital helped facilitate DZ Bank’s operational elements. The first banks are planned to be connected by the end of 2024.

The collaboration will enable approximately 700 cooperating banks under DZ Bank’s umbrella to provide retail customers with digital asset access.

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