Swisscom, Deutsche Börse and three other partners have successfully settled a securities transaction using tokenized shares via distributed ledger technology (DLT).
Three banking partners participated in the digital asset transaction; Falcon Private Bank, Vontobel and Zürcher Kantonalbank.
According to Swisscom, the proof of concept event indicates the efficacy of digital securities in shares of SMEs.
Deutsche Börse and Swisscom jointly designed and developed the IT architecture with the systems hosted on Swisscom’s infrastructure.
The group explained that the share registry of a real Swiss enterprise was digitalized using the platform of the start-up company daura, and the shares were then tokenized. daura is a company that uses blockchain technology to digitize shares of small, medium-sized and established companies from Switzerland.
To enable the execution of a delivery-versus-payment transaction based on DLT, money was made available in the form of cash tokens provided by Deutsche Börse in Swiss Francs. Money was deposited as collateral in the central bank account of Eurex Clearing at the Swiss National Bank. The banks acted as counterparties and exchanged securities tokens against cash tokens using DLT.
The group reports that two different DLT protocols were utlized: Corda and Hyperledger Fabric.
Johs Höhener, Head Fintech at Swisscom, said that DLT has the potential to reach a new level of speed and efficiency in the financial services sector.
“In order to maintain Switzerland’s leading position in digital assets, cooperation and new platforms are needed,” said Höhener. “This proof of concept is an excellent example of successful collaboration and innovative strength across company boundaries.”
Jens Hachmeister, Head of New Markets at Deutsche Börse Group. said the event was of strategic importance to his company as it further develops the potential of securities transactions using DLT:
“This brings us one step closer to our goal of enabling the financial services industry in Germany and in Switzerland to efficiently use the potential of this new technology.”
Deutsche Börse and Swisscom are working on a comprehensive ecosystem for digital assets. Custodigit, a custody solution, is a joint venture of Swisscom and Sygnum.