Commerzbank and Deutsche Börse carried out a legally binding securities settlement via distributed ledger technology. The repo transaction was conducted as part of a proof of concept, demonstrating the security and transparency of block-based delivery-by-payment.
It is proof of Blockchain’s possibilities for legally binding securities transactions: In the course of a Proof of Concept (PoC) of Deutsche Börse in cooperation with Commerzbank, the partners successfully concluded a repo transaction using Distributed Ledger Technology (DLT), such as Deutsche Stock Exchange announced on March 6.
Combination of cash tokens and security tokens for simultaneous exchange
In a repo transaction, which is also called repurchase agreement, a financial transaction combines the simultaneous sale and subsequent repurchase of a security. Banks can use these money market instruments to secure their liquidity needs in the short term.