Last week we reported that Germany’s DZ Bank and other banks were working with four corporates on a proof of concept or deposit tokens. We can confirm the other banks are Commerzbank, Helaba and Unicredit. The banks are using a model developed in conjunction with the four major German banking associations for commercial bank money tokens (CBMT). This week the associations expanded the concept to support multiple currencies.
At a big picture level, the CBMT system enables clients of different banks to pay each other using digital currency, similarly to conventional bank payments. The tokens are minted onto third party DLT networks such as a consortium blockchain with corporate customers as the target users.
If a corporate receives a bank deposit token where it doesn’t have an account with that bank, it will be converted to a token of its own bank. In essence, the banks exchange the tokens and settle with each other in a similar way to conventional payments.
Article continues …
Want the full story? Pro subscribers get complete articles, exclusive industry analysis, and early access to legislative updates that keep you ahead of the competition. Join the professionals who are choosing deeper insights over surface level news.
