Clearstream Banking Luxembourg launches tokenisation platform D7 DLT

• Following successful tests as part of the ECB trials, Clearstream has launched a tokenisation platform for clients to issue and settle tokenised securities

• The earliest users of the tokenisation platform are expected to be issuers of commercial paper and Medium-Term Notes (MTNs) in the Euromarkets

• D7 DLT, which marks an expansion of the four-and-a-half-year-old D7 issuance platform, is a Cloud-based service supported by Google Cloud

Clearstream has added a tokenised securities platform to the D7 digital issuance and settlement platform it launched in October 2021, and which secured considerable success in making the German structured product issuance market more efficient.

The new service, branded D7 DLT, provides clients of Clearstream Banking S.A. in Luxembourg with the ability to issue tokenised securities on to blockchain.

Launching the service via Luxembourg reflects a belief at Clearstream that the earliest users of D7 DLT are likely to be Euromarket issuers. Clearstream says the first issuances are expected to emerge in the Euro commercial paper and medium-term note markets.

Indeed, the launch follows successful pilot tests of primary market issuances of commercial paper by DekaBank, DZ Bank, Land Sachsen-Anhalt and L-Bank as part of the DLT trials and pilot tests held under the auspices of the European Central Bank (ECB) between May and November 2024.

The tests proved that short term debt issuers can benefit from faster and more efficient primary market processes in the same way as structured product issuers in the German domestic market benefited from D7.

Clearstream also used D7 to test successfully an intra-day repo transaction with DZ BANK and J.P. Morgan as part of the ECB trials.

D7 DLT enables issuers to issue tokenised securities directly onto a blockchain, eliminating the inefficiencies and complexities associated with traditional issuance methods.  The blockchain also provides an immutable and transparent record of ownership, adjusting as transactions occur.

Clearstream says D7 DLT is fully interoperable with existing traditional market infrastructures, including Clearstream Banking for settlement in a central securities depository (CSD) and the Deutsche Börse-owned 360X Multi-lateral Trading Facility (MTF) on the trading side, which can support blockchain-native securities.

“This is a landmark achievement for Clearstream and the wider financial community,” says Jens Hachmeister, Head of Issuer Services and New Digital Markets at Clearstream.  “D7 is reinventing how securities are issued, managed, and traded, benefiting all market participants, providing the flexibility to choose between digital and tokenised issuance. The platform offers a unique combination of innovation and practicality, addressing current client needs while paving the way for the future of finance, advancing capital markets in Europe and globally.”

Interestingly, the D7 DLT platform is a collaborative venture with Google Cloud, with which Deutsche Börse signed a ten-year strategic partnership in February 2023. Google provides the Cloud infrastructure for D7 DLT.

“Our collaboration with Clearstream on the D7 DLT platform is a powerful example of innovation in digital finance,” says Matt Renner, President, Global Revenue, at Google Cloud. “By combining our secure and scalable infrastructure with Clearstream’s expertise in distributed ledger technology, we’re helping to redefine how securities are issued and managed. This platform is not just about meeting today’s needs; it’s also about building a more efficient, transparent, and secure future for capital markets globally.”