BNP Paribas played a pivotal role in these trials, leveraging its proprietary platforms, Neobonds and AssetFoundry, to explore real and simulated transactions with Banque de France, Deutsche Bundesbank, and Banca d’Italia.
This initiative seeks to deepen the understanding of how Eurosystem payment infrastructures interact with market DLT platforms, fostering financial stability and accelerating the digital transformation of European capital markets.
In 2024, the Eurosystem tested three payment solutions: Banque de France’s full DLT interoperability solution, Deutsche Bundesbank’s Trigger Solution, and Banca d’Italia’s TIPS Hash-Link. These experiments focused on integrating tokenized financial instruments and cash settlement using DLT to improve efficiency, programmability, and transparency in capital markets.
BNP Paribas conducted ten use cases during the trials, utilising both its Neobonds platform, built on the Canton blockchain, and its Ethereum-based AssetFoundry platform. These tests also involved external DLT platforms, enabling BNP Paribas to act as both a market DLT participant and operator, collaborating with issuers, investors, and other market participants.
BNP Paribas facilitated the issuance and secondary trading of the first Eurozone sovereign digital bond for Slovenia, valued at EUR 30 million, using the Neobonds platform. The secondary market activity involved investors such as AXA IM, Banque de France, and the European Investment Bank (EIB).
The bank tested the Trigger Solution for the settlement of a BNP Paribas bond, issued and traded on Neobonds. Additional experiments were conducted on the AssetFoundry platform, exploring cash settlement processes in DLT-based wholesale financial transactions.
BNP Paribas explored Banca d’Italia’s TIPS Hash-Link, conducting tests on a simulated bond issuance and settlement. This solution uses a dedicated TARGET Instant Payment Settlement (TIPS) instance with an API-based lightweight protocol to ensure simple integration.
BNP Paribas also contributed to several milestone projects during these trials. The bank acted as a joint lead manager for the European Investment Bank’s EUR 100 million 3-year digital bond issuance, settled on HSBC’s ORION platform. Additionally, it supported Caisse des Dépôts in issuing digitally native notes on Euroclear’s D-FMI tokenization platform.
The Eurosystem’s trials underscore the transformative potential of DLT in wholesale financial markets. With BNP Paribas’ active involvement, these experiments have provided valuable insights into the future of tokenized financial instruments and the broader adoption of digital technologies in Europe’s financial ecosystem. These advancements pave the way for more efficient, transparent, and stable markets in the years to come.
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