Germany’s SWIAT, the DLT tokenization network founded by DekaBank, is proposing a trigger payment solution, Cycros, to use central bank money to settle digital asset transactions. One of the benefits of distributed ledger technology (DLT) is the reduction in risk by enabling the simultaneous transfer of money and tokenized securities in delivery versus payment (DvP) transactions. Ideally, this would be done with central bank digital currency (CBDC).
However, a CBDC digital euro will not likely come online soon, so a trigger payment solution provides an alternative in the interim. Particularly as March 2023 sees the launch of the Eurozone DLT Pilot Regime, which supports blockchain-based securities trading and settlement infrastructures.
The Banque de France has already demonstrated a willingness to get involved in projects using its pilot wholesale CBDC. However, it remains to be seen at what scale this will be available, given the Pilot regime should be many tens of billions or even hundreds of billions in volume.
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