Clearstream today announced that LBBW and Vontobel have issued digital securities on the Deutsche Börse D7 platform. Clearstream is Deutsche Börse’s post-trade service provider and D7 is its new digital post-trade platform.

In mid-2021, Germany passed its eWpG legislation supporting digital native electronic values. According to the law, the securities registry can be central or decentralized through blockchain. Today’s issues are centrally registered securities, following the launch of D7 last year, which began by providing a digital central securities depository. That’s because existing values ​​can be represented digitally.

The orchestration uses the DAML smart contract language, although the blockchain is not yet supported. Clearstream said that “digital instruments are intelligent objects that represent electronic values.” They have all the data necessary for automation, which allows direct processing. In turn, this should minimize the need for reconciliations.

“This takes the issuance of structured products from days to minutes,” said Jens Hachmeister, director of Issuer Services and New Digital Markets at Clearstream. “We are accelerating time to market and unlocking a whole new universe of product opportunities as we continue to venture into fully digitized markets.”

Digital instruments are not specific to particular technologies or asset classes. In these examples, LBBW issued a bonus certificate and Vontobel issued a structured security.

“In addition to a highly automated trading process, an efficient, digitized issuance and settlement process is of great importance for the retail certificate business,” said Jan Krüger, Head of Equity Markets at LBBW.

The next step for D7 is DeNet, which will support blockchain-based securities. So far, Deutsche Borse is working with VMWare Blockchain and R3’s Corda enterprise blockchain, but also anticipates public blockchains. The first blockchain-enabled digital securities are likely to be for networks in which Clearstream has invested. These include HQLAᵡ, the digital securities and collateral platform, and the tokenized fund network FundsDLT.