Deutsche Bundesbank (Germany’s central bank) and the Deutsche Börse (Germany’s “marketplace organizer for the trading of shares and securities”) have reportedly finished running performance tests for a blockchain-based securities settlement system. The tests, which were conducted using prototypes defined by both financial institutions, support a wide range of financial transactions.
According to Bundeskbank, the distributed ledger technology (DLT) based prototypes were used to test transactions involving interest payments, repayments, and securities settlement.
Hyperledger Fabric (version 1.0), a blockchain-enabled framework for smart contracts referred to as “chaincode”, and a digital asset platform were used to develop the prototypes. Both financial institutions have now reported that the performance tests were successful and that these transactions may be carried out in high-performance production environments.
Performance Criteria For Blockchain Payments
Performance was measured and assessed based on “transaction volume”, or capacity, which was measured “based on the throughput.” This was determined by calculating “the number of successfully executed transactions per minute.”
Other metrics used to evaluate the effectiveness of the blockchain-based payment prototypes were their speed – which “was measured based on the latency – the time to execute a single transaction in the load scenario.”
Additionally, the efficiency of “resource utilization” was measured “based on the storage usage, the CPU utilization and the network traffic.” Commenting on the success of the performance tests, Burkhard Balz, the member of the executive board of Germany’s Deutsche Bundesbank, said:
During this project, Deutsche Bundesbank and Deutsche Börse learned a lot about the usage of this technology and its concrete implementation. We expect the rapid development to continue, and also see the potential in using it for high-volume applications. The approach of a permissioned architecture, which takes into account the requirements of the financial sector from the outset, has proven to be right.
Use Cases In Settlement, “Other Financial Infrastructures”
Meanwhile, Berthold Kracke, the CEO of Clearstream Banking AG and head of Clearstream Global Operations at Deutsche Börse Group remarked:
We are very happy with the results of the project. The tests have shown that blockchain technology is a suitable basis for applications in the field of settlement and other financial infrastructures. Thanks to the cooperation with Deutsche Bundesbank and the expertise of Digital Asset, we were able to tailor the product to the needs of the industry.
As mentioned, the blockchain-powered settlement prototypes were developed through a joint researchproject involving Deutsche Bundesbank and Deutsche Börse. Referred to as BLOCKBASTER, the DLT-based settlement tech report noted that both institutions had been working on the project since March of 2016.
The reported also mentioned that the blockchain project was undertaken in order to “improve back-office services” and was initiated because of the need to keep abreast of and utilize the latest financial technology (fintech).