The Depository Trust & Clearing Corporation (DTCC), in partnership with The Digital Dollar Project (DDP) and Accenture, has published a white paper titled “Exploring Post-Trade Security Settlement with a US Central Bank Digital Currency.” The paper outlines the findings of a pilot project exploring how digital securities (tokenized) can operate in the settlement infrastructure using a CBDC and distributed ledger technology (DLT).
The firms participating in the pilot include Bank of America, Citi, Nomura, Northern Trust, State Street, Virtu Financial, and Wells Fargo.
The DTCC paper notes:
“Over 105 countries, representing about 95 percent of global GDP and 19 of the G20 countries are exploring CBDC. The European Central Bank (ECB) is currently undertaking a two-year investigation phase of its retail “Digital Euro” project (anticipated to be completed at the end of 2023) and is considering whether new technologies like DLT could improve settlement in central bank money for wholesale transactions. China reports that its digital fiat currency, the eCNY, is held in over 250 million digital wallets and is already responsible for a remarkable 87.5 billion yuan ($13.78 billion) worth of transactions.”
As much of the developed world is investigating a CBDC, the DTCC project makes a lot of sense, even though it is yet to be determined if CBDCs, using DLT, will eventually become the norm.