Conducted trials and experiments with the Trigger Solution
As part of the Eurosystem exploratory work to test new technologies for the settlement of wholesale transactions in central bank money, from May to November 2024, Eligible Market Participants and Eligible Market DLT Operators had the opportunity to explore the interoperability solution(s) of their choice offered by the Eurosystem. The Deutsche Bundesbank’s Trigger Solution was one of these three available solutions. It links DLT platforms operated by the market with the traditional Eurosystem payment system (TARGET), thus enabling the direct settlement of DLT-based wholesale transactions on participants’ existing RTGS accounts in central bank money. The exploratory work comprised both trials in the production systems and experiments in the test environments.
The Eurosystem exploratory work was completed on 29 November 2024. Twenty-five institutions explored the Bundesbank’s Trigger Solution, including 20 in the role of market participant and 11 as market DLT operator. In total, 23 explorations were conducted with the Trigger Solution; 15 trials and 8 experiments. In addition, there were nine redemptions of securities issued as part of the exploratory work by making use of the Trigger Solution. This page contains a chronological compilation of all explorations with the Trigger Solution, the respective underlying use cases and the institutions involved.
Trial: Intraday triparty repo transactions
Between 26th and 28th of November 2024, Clearstream Banking S.A., Goldman Sachs, Eurex Repo and HQLAX executed two triparty intraday repo transactions. Clearstream Banking S.A. assumed the roles of the market DLT operator, transaction coordinator and, in the repo, the cash provider (collateral receiver). Goldman Sachs acted as cash taker (collateral provider). The repos were carried out via Eurex Repo’s F7 trading system. The subsequent settlement of the repos was facilitated via HQLAX platform and the Bundesbank’s Trigger Solution, which was orchestrated by Clearstream Banking S.A. as transaction coordinator via Deutsche Börse’s D7 platform. Specifically, ownership of the underlying securities of the repo transactions was transferred on the HQLAX platform and simultaneously settled vs. cash, leveraging the Trigger Solution, which resulted in real-time finality into the RTGS accounts of Clearstream Banking S.A. and Goldman Sachs in TARGET, the Eurosystem’s payment system. As the name suggests, the closing legs of each intraday triparty repo were executed on the same day as the corresponding opening leg.
Redemption of the bearer bond issued on 28 August 2024
The blockchain-based digital bearer bond issued by KfW with a three-month maturity at the end of August 2024, was successfully redeemed by KfW from the investors DekaBank, DZ BANK and Union Investment on 28 November 2024. The redemption of the bond was carried out – just like the issuance – on the blockchain infrastructure of Cashlink Technologies. By making use of the Bundesbank’s Trigger Solution, the corresponding cash bookings took place in TARGET, the Eurosystem’s payment system.
Redemption of the registered bond issued on 8 October 2024
The digital registered bond issued by WIBank and purchased by Bankhaus Metzler at the beginning of October was successfully redeemed by the issuer WIBank on 27 November 2024. As with the issuance, the redemption was conducted on the blockchain infrastructure of Cashlink Technologies with same-day settlement. Helaba again acted as cash settlement agent for WIBank. The respective bookings on the banks’ RTGS accounts in TARGET were initiated via the Bundesbank’s Trigger Solution.
Experiment: Digital bilateral intraday repo transactions
On 22 November 2024, DekaBank and NatWest Markets N.V., together with their technology partner SWIAT, tested the conduct of bilateral intraday repo transactions using the Bundesbank’s Trigger Solution for the cash settlement. Concretely, two scenarios were considered: As part of a first simulation, a traditionally issued security was on-ramped to SWIAT’s blockchain infrastructure in order to be able to use it in a digitalised form for the repo transaction. In a second simulation, a native digital security was used for the repo transaction. In both cases, DekaBank assumed the role of the market DLT operator and acted as a collateral giver in the repo transaction. NatWest Markets acted as collateral taker in both scenarios. The front and term legs of the repos were executed on the SWIAT blockchain network with same-day settlement. The Trigger Solution was used to initiate the cash bookings on the RTGS accounts of both banks in the T2 UTEST, the test environment of the payment system TARGET.
Redemption of two digital bearer bonds
On 21 November 2024, two digital bearer bonds issued by DekaBank as part of the Eurosystem exploratory work using the Bundesbank’s Trigger Solution were successfully redeemed: First, the bearer bond issued on 11 July and purchased by Bankhaus Metzler; Second, the bearer bond issued on 21 October with LBBW as the investor. The redemption of both papers – just like the issuance – was executed same day and fully automated via the SWIAT-Synchronizer on the blockchain infrastructure of the technology provider SWIAT. The respective bookings on the participating banks’ RTGS accounts in TARGET were initiated via the Trigger Solution.
Redemption of the commercial paper issued on 25 October 2024
On 19 November 2024, the commercial paper issued by L-Bank and purchased by NatWest Markets N.V. on 25 October was successfully redeemed by L-Bank. As with the issuance, Deutsche Börse’s D7 platform was used for this purpose. The respective bookings on the RTGS accounts in TARGET were initiated via the Bundesbank’s Trigger Solution.
Trial: Execution of a digital bilateral repo
In the week from 11 to 15 November 2024, DekaBank and LBBW, together with their technology partner SWIAT, explored the execution of a bilateral repo using the Bundesbank’s Trigger Solution for the cash settlement. To this end, a traditionally issued security was on-ramped to SWIAT’s blockchain infrastructure in order to be able to use it in a digitalised form for the repo transaction. The front leg of the five-day repo was successfully executed on the SWIAT blockchain network on 11 November with same-day (t+0) settlement. Execution and same-day settlement of the term leg followed on 15 November. The repo transaction was conducted as a trial. The transactions thus led to real and final bookings on DekaBank’s and LBBW’s RTGS accounts in TARGET, the Eurosystem’s payment system, by making use of the Trigger Solution.
Redemption of the commercial papers issued as part of the first trials with the Trigger Solution
On 28 June and 1 July 2024, the first two trials with the Bundesbank’s Trigger Solution took place as part of the Eurosystem’s exploratory work: The issuance of two commercial papers with the use case team Clearstream Banking AG as market DLT operator as well as DekaBank and DZ Bank, each of which acted as issuer and investor of the papers respectively. These two commercial papers were now successfully redeemed by the issuers, thus DekaBank and DZ Bank, on 14 and 15 November 2024. As with the issuance, Deutsche Börse’s D7 platform was used for this purpose. The cash settlement of the repayments was carried out via the Bundesbank’s Trigger Solution on the RTGS accounts of the two banks in TARGET, the Eurosystem’s payment system.
Experiment: Issuance of a digital security
On 13 November 2024, the European Investment Bank (EIB), the Luxembourg central securties depository LuxCSD, the Luxembourg bank Spuerkeess and NatWest Markets N.V. simulated the issuance of a digital security in the form of an experiment. The EIB acted as the issuer of the paper which was technically issued on the test environment of Deutsche Börse‘s D7 platform. LuxCSD thus assumed the role of the market DLT operator. NatWest Markets N.V. acted as the lead manager of the issuance. The paper was fictitiously purchased by NatWest Markets N.V. and Spuerkeess, the Banque et Caisse d’Epargne de l’Etat Luxembourg, who participated in this use case as investors. The Bundesbank’s Trigger Solution was used for the cash settlement of the transaction. The experiment thus resulted in bookings on the T2 UTEST, the test environment of the Eurosystem’s payment system TARGET.
Redemption of the digital commercial paper issued on 11 September 2024
The commercial paper issued on 11 September 2024 by the federal state of Saxony-Anhalt (represented by the ministry of finance) and purchased by DekaBank was successfully redeemed by the issuer on 11 November 2024. As with the issuance, Deutsche Börse’s D7 platform was used for this purpose. The Bundesbank acted again as the house bank for Saxony-Anhalt. The respective bookings on the RTGS accounts in TARGET were initiated via the Bundesbank’s Trigger Solution.
Experiment: Settlement of (cross-border) corporate bank client payments
In addition to securities-related use cases, the Eurosystem’s exploratory work also enables payment-related business cases to be explored in the form of experiments. Deutsche Bank and UBS conducted such an experiment on 7 November 2024. The aim was to settle fictitious corporate bank client payments between UBS and Deutsche Bank on the basis of tokenised deposits using the Bundesbank’s Trigger Solution. Technically, the DLT platforms of both banks were connected via an orchestration network. After successful settlement via the Trigger Solution, the tokenized deposits were debited on the platform of the sender bank (“burning”) and credited on the platform of the recipient bank ("minting"). Two scenarios were considered: First, time-critical euro payments between Deutsche Bank and UBS clients. Second, payments originally denominated in Swiss franc and British pound between customers of Deutsche Bank London and UBS Switzerland, which were settled in euro in the test environment (UTEST) of TARGET services by making use of the Trigger Solution.
Trial: Issuance of a digital bond and secondary market trading
On 24 October 2024, BNP Paribas priced, issued and settled a bond with its Neobonds tokenization platform as market DLT operator, using the Bundesbank’s Trigger Solution for the cash settlement of the transaction. Neobonds is BNP Paribas Global Markets’ private, Canton based tokenization platform. The Neobonds DLT was interfaced to the Trigger Solution by BNP Paribas’ AssetFoundry. The issuance was conducted as a trial and thus led to real and final bookings on the BNP Paribas’ RTGS accounts in TARGET, the Eurosystem’s payment system. In addition, on 30 October 2024, the Neobonds platform as well as the Trigger Solution were used to trial a secondary market transaction.
Trial: Issuance of a digital commercial paper
On 25 October 2024, the market DLT operator Clearstream Banking AG and the two market participants L-Bank and NatWest Markets N.V. explored the issuance of a digital commercial paper using the Bundesbank’s Trigger Solution for the cash settlement. L-Bank was the issuer of the paper under the German Electronic Securities Act (eWpG). NatWest Markets acted as dealer and investor. The paper was issued on the D7 platform of Deutsche Börse that with Clearstream Banking AG also took over the roles of registrar and transaction manager. The use case was conducted as a trial and thus resulted in real and final bookings on the RTGS accounts of the participating banks in TARGET, the Eurosystem’s payment system, by using the Bundesbank’s Trigger Solution.
Trial: Issuance of a digital registered bond
On 24 October 2024, LBBW and DekaBank explored the issuance of a digital registered bond together with the Bundesbank’s Trigger Solution. LBBW acted as issuer of the bond and as market DLT operator while DekaBank assumed the role of investor. The registered bond was issued same-day on the blockchain infrastructure of SWIAT, the technology partner of the use case team in this trial. By using the Trigger Solution for the cash settlement of the issuance, the exploration directly led to real and final bookings in TARGET, the Eurosystem’s payment system.
Trial: Issuance of a digital bearer bond
On 21 October 2024, the use case partners DekaBank and LBBW explored the issuance of a digital bearer bond using the Bundesbank’s Trigger Solution for the cash settlement. DekaBank took over the roles of issuer and registrar, while LBBW acted as investor. DekaBank also acted as market DLT operator. The bearer bond was issued same-day on the blockchain infrastructure of the use case team’s technology partner SWIAT. The use case was conducted as trial and thus resulted in real and final bookings on the RTGS accounts of DekaBank and LBBW in TARGET, the Eurosystem’s payment system, by using the Trigger Solution.
Redemption of the digital registered bond issued on 18 July 2024
On 17 October 2024, the first redemption of a security issued using the Bundesbank’s Trigger Solution took place. The registered bond issued by Bayerische Landesbank and purchased by Stadtsparkasse München on 18 July was redeemed successfully by the issuer on the SWIAT blockchain on 17 October. Helaba again acted as a cash settlement agent for Stadtsparkasse München, the recipient of the redemption payment. As before, technical support was provided by the two technology providers SWIAT and NTT DATA.
Series of experiments on bond issuance, redemption and coupon payments
From 2 to 9 October 2024, the Lithuanian-based capital markets infrastructure provider Axiology tested the primary distribution, coupon payments and redemption of various bonds such as government debt securities using the Bundesbank’s Trigger Solution. The focus was on Axiology’s blockchain-based trading and settlement system, which was used for the simulated settlement of the primary distribution, coupon payments and maturity redemption. Each test run involved settling between ten and fifteen transactions, processed either in parallel or sequentially. The Bundesbank’s Trigger Solution was used for the cash settlement of the transactions. Specifically, the Trigger Solution transferred the blockchain-based payment instructions initiated by Axiology in the Trigger Solution, in ISO 20022 format to the T2 UTEST, the test environment of the Eurosystem’s payment system TARGET, where the cash booking occurred. The central bank of Lithuania, Lietuvos bankas, provided the test accounts on the T2 UTEST for the Axiology experiment.
Trial: Issuance of a digital registered bond
On 8 October 2024, the use case team consisting of WIBank, Cashlink Technologies, Helaba and Bankhaus Metzler explored the same-day (t+0) issuance of a digital registered bond using the Bundesbank’s Trigger Solution for the cash settlement. The issuer of the registered bond was WIBank, Wirtschafts- und Infrastrukturbank Hessen. Helaba acted as cash settlement agent for WIBank, to which WIBank legally belongs. The investor of the registered bond was Bankhaus Metzler. The market DLT operator Cashlink tokenised the registered bond and provided the blockchain infrastructure for executing the settlement. The exploration was conducted as a trial; thus it comprised the issuance of a real registered bond that led to real and final bookings in TARGET, the Eurosystem’s payment system, by using the Bundesbank’s Trigger Solution.
Series of experiments on various secondary market constellations
On 18 and 25 September 2024, the Baden-Württembergische Wertpapierbörse – part of Boerse Stuttgart Group – as market DLT operator, together with the market participants Commerzbank, Deutsche Bank, DZ BANK, LBBW, Bankhaus Metzler and V‑Bank, explored a wide range of secondary market transactions in various constellations using the Bundesbank’s Trigger Solution for the cash settlement. The focus was on the blockchain-based delivery-versus-payment settlement solution developed by BX Digital, a company of Boerse Stuttgart Group. In total two different scenarios with five digital securities – bonds, fund and equity – were explored: In a first scenario, trading took place between the aforementioned market participants, who themselves have access to TARGET, the Eurosystem’s payment system, and thus have their own account with the central bank. In a second scenario, EUWAX, a member of Boerse Stuttgart Group, joined as a market maker, which does not have its own TARGET access and thus made use of a cash settlement agent. Deutsche Bank assumed this role. In addition to the "happy path", i.e. that the transactions go through as planned, constellations were also explicitly and deliberately created that should not occur in practise in this way, but can occur in exceptional cases. For example that the securities agreed in the trade are not available at the time of settlement or that there is insufficient liquidity on the accounts. This deliberate failure of a transaction can be used to draw valuable conclusions about system behaviour and the processes implemented, which in turn helps to make the desired happy path more stable. All transactions were conducted as experiments and took place in the test environments; thus also in the T2 UTEST, the test environment of the Eurosystem’s payment system.
Experiment: Test of a Smart Derivative Contract
In the week from 23 to 27 September 2024, DZ BANK explored the automated post-trade processing of a Smart Derivative Contract (SDC) using the Bundesbank’s Trigger Solution. The experiment simulated the processing of an over-the-counter derivative (“OTC”) – to be precise an interest rate swap – that was traded as a Smart Derivative Contract under real market conditions and then settled fully automated twice each day over several business days using a live market data feed. The resulting payments were settled via the Bundesbank’s Trigger Solution. DZ BANK was the first participant to operate an own node in the Trigger Solution DLT network for its SDC use case. This form of connectivity allows among others the use of own smart contracts; thus in the case of DZ BANK the smart derivative contract. In this configuration, a separate market DLT operator is not required. The experiment led to bookings in the T2 UTEST, the test environment of the Eurosystem’s payment system.
Trial: Issuance of a digital savings bank bond
On 24 September 2024, DekaBank, Sparkasse Dortmund and Helaba explored the issuance of a digital savings bank bond on the blockchain network of their technology partner SWIAT using the Bundesbank’s Trigger Solution. The registered bond was issued by Sparkasse Dortmund. Helaba acted as cash settlement agent for the savings bank. DekaBank took over the roles of the market DLToperator and registrar as well as the role of the investor on market participant side. The bond was issued same-day, i.e. in the technical jargon t+0. The use case was explored as a trial, thus taking place in the participants’ production systems and, using the Trigger Solution, led to real and final bookings on the RTGS accounts of Helaba and DekaBank in TARGET, the Eurosystem’s payment system.
Experiment: Execution of a centrally cleared intraday repo
On 12 September 2024, the first repo experiment with the Bundesbank’s Trigger Solution and the use case team Eurex Clearing, Eurex Repo, DZ BANK, J.P. Morgan and Clearstream Banking AG took place. A simulated version of the commercial paper issued by DekaBank on the Deutsche Börse D7 platform at the end of June – also as part of the Eurosystem exploratory work – served as the underlying security for the intraday repo use case. DZ BANK, which was the investor in the above-mentioned issuance process, now acted as seller (collateral provider) in the course of the repo, while J.P. Morgan acted as buyer (collateral taker). The repo was carried out via Eurex Repo’s F7 trading system. Eurex Clearing performed the clearing of the transaction before it was settled by Clearstream Banking AG via Deutsche Börse’s D7 platform. The Bundesbank’s Trigger Solution was used for the cash settlement of the transaction and thus led to bookings on T2 UTEST, the test environment of the Eurosystem’s payment system. As the name suggests, the closing leg of the intraday repo was executed on the same day.
Trial: Issuance of a digital commercial paper
On 11 September 2024, the use case team consisting of the federal state of Saxony-Anhalt, represented by the ministry of finance, the market participants NatWest Markets N.V. and DekaBank as well as the market DLT operator Clearstream Banking AG explored the issuance of a digital commercial paper using the Bundesbank’s Trigger Solution for the cash settlement of the transactions. The state of Saxony-Anhalt was the issuer of the paper under the German Electronic Securities Act (eWpG). NatWest acted as dealer in the issuance process. The Bundesbank, as the house bank for public administrations, provided the underlying RTGS account for Saxony-Anhalt for the cash settlement of the transaction. DekaBank acted as investor. The paper was issued on the D7 platform of Deutsche Börse that with Clearstream Banking AG also took over the roles of registrar and transaction manager. With the trial, for the first time a real commercial paper from a public authority was issued via the Trigger Solution. The underlying transactions led directly to real and final bookings in the production systems of the parties involved and in TARGET, the Eurosystem’s payment system.
Trial: Issuance of a digital corporate bond
On 3 September 2024, the use case team DekaBank, Deutsche Bank, BayernLB, DZ BANK, Helaba and LBBW together with their technology partner SWIAT explored the issuance of a digital corporate bond using the Trigger Solution for the cash settlement of the primary distribution. The bearer bond under the German Electronic Securities Act (eWpG) was issued by Siemens. BayernLB, DekaBank, DZ BANK, Helaba and LBBW were the investors. DekaBank also took over the roles of registrar and market DLT operator. Deutsche Bank ensured settlement for Siemens in central bank money via the Trigger Solution. The bond was issued same-day on the blockchain network of the technology provider SWIAT. The use case was conducted as a trial, thus meaning the issuance of a real corporate bond which resulted in real and final bookings in TARGET, the Eurosystem’s payment system, by using the Trigger Solution.
Trial: Issuance of a digital bond
On 28 August 2024, the use case team consisting of KfW, DZ BANK, Cashlink Technologies, DekaBank and Union Investment issued a digital bearer bond using the Trigger Solution for the cash settlement of the primary distribution. KfW issued the digital bearer bond in the form of a crypto security according to the Electronic Securities Act (eWpG). The bond was issued on the blockchain infrastructure of the Market DLT Operator Cashlink that acted as the crypto securities registrar. With regard to the issuance, DZ BANK took over the roles of bookrunner, collectively registered owner holding the bond issue and the provision of the investors’ custody infrastructure. DekaBank, DZ BANK and Union Investment acted as investors. The custody infrastructure for KfW is provided by Boerse Stuttgart Digital Custody. The exploration was conducted as a trial and thus ultimately resulted in real and final bookings on the cash accounts of the participants in TARGET, the Eurosystem’s payment system.
Trial: Issuance of a digital registered bond
On 18 July 2024, the first trial of a wave 2 use case team with the Deutsche Bundesbank’s Trigger Solution took place. The use case team Bayerische Landesbank, Helaba (Landesbank Hessen-Thüringen) and Stadtsparkasse München explored the cash settlement of the issuance of a digital registered bond by using the Trigger Solution. Helaba acted as cash settlement agent for Stadtsparkasse München as buyer of the digital registered bond. Bayerische Landesbank assumed the roles of the market DLT operator and, on the participant side, of the issuer of the underlying security. The use case team received technical and specialist support from the two technology providers SWIAT, on whose blockchain network and software the registered bond was issued, and NTT DATA.
Trial: Issuance of a digital bearer bond
On 11 July 2024, the use case partners DekaBank Deutsche Girozentrale and Bankhaus Metzler explored the cash settlement of the issuance of a digital bearer bond together with the Trigger Solution. DekaBank assumed the roles of issuer as well as market DLT operator and registrar, while Bankhaus Metzler acted as investor. The bearer bond was issued same-day on the blockchain infrastructure of the use case team’s technology partner SWIAT. The use case was conducted as a trial and thus resulted in real and final bookings on the RTGS accounts of the participating banks in TARGET, the Eurosystem’s payment system, by using the Deutsche Bundesbank’s Trigger Solution.
Experiment: Issuance and primary distribution of a bond
The first experiment with the Trigger Solution was performed on 8 July 2024. BNP Paribas explored the issuance and primary distribution of a bond using its AssetFoundry – Ethereum based – tokenization platform. The experiment took place with mock data in the test environments of the participants. The simulated cash settlement was carried out using the Deutsche Bundesbank’s Trigger Solution which resulted in bookings on the BNP Paribas’ RTGS test accounts in the T2-UTEST environment, the test environment of the Eurosystem’s payments system. For the purpose of this experiment, BNP Paribas played both, the role of the market DLT operator and the role of market participants as issuer and as investor in the simulation.
Trial: Issuance and primary distribution of a commercial paper
On 28 June and 1 July 2024, the first two trials with the Deutsche Bundesbank’s Trigger Solution were successfully settled. The use case comprised the issuance and primary distribution of a commercial paper with the use case team Clearstream Banking Frankfurt AG as market DLT operator with its digital D7-platform and the two market participants DekaBank Deutsche Girozentrale and DZ Bank AG Deutsche Zentral-Genossenschaftsbank. The exploration was conducted as a trial in the participants’ production systems and ultimately resulted in real and final bookings in TARGET, the Eurosystem’s payment system, by using the Deutsche Bundesbank’s Trigger Solution.