General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
March 27, 2018

ECB published a report on the second phase of Project Stella, which is a joint research project of ECB and BOJ. The report describes the key findings of the joint study (of ECB and BOJ) on the application of distributed ledger technology (DLT) in securities settlement systems. The objective of Stella phase 2 is to explore how the settlement of two linked obligations, such as the delivery of securities against the payment of cash, could be conceptually designed and operated in an environment based on DLT. Legal aspects have not been the object of the study.

The report examines the ways in which delivery versus payment (DvP) can be conceptually designed and technically achieved in a DLT environment. The report draws on the existing DvP models and innovative solutions that are being discussed for distributed ledgers. The analysis is based on a basic, stylized scenario of two counterparties exchanging securities against cash. As was the case in Stella phase 1, this work does not attempt to replicate the existing payment and securities settlement systems and is not geared toward replacing the existing central bank services with DLT-based solutions.

The report presents key results of the second phase of the project and outlines the categorization of DvP solutions in a DLT environment, based on whether assets are on the same or separate ledger. It then describes generic process flows for each DvP approach and assesses their main characteristics from a range of perspectives. The key findings of the analysis are as follows:

  • DvP can run in a DLT environment subject to the specificities of different DLT platforms
  • DLT offers a new approach for achieving DvP between ledgers, which does not require any connection between ledgers
  • Depending on their concrete design, cross-ledger DvP arrangements on DLT may entail complexity and could give rise to additional challenges, which would need to be addressed

 

Related Links

Keywords: Asia Pacific, Europe, Japan, PMI, DLT, Delivery versus Payment, Fintech, BOJ, ECB

Related Insights
News

US Agencies Propose Revisions to FFIEC Reports 031, 041, 051, and 101

US Agencies (FDIC, FED, and OCC) propose to extend for three years, with revision, FFIEC 031, FFIEC 041, FFIEC 051, and FFIEC 101.

February 21, 2019 WebPage Regulatory News
News

OFR Adopts Data Collection Rule on Centrally Cleared Repo Transactions

OFR adopted a final rule to establish a data collection covering centrally cleared funding transactions in the U.S. repurchase agreement (repo) market.

February 20, 2019 WebPage Regulatory News
News

FHFA Finalizes Rule on Federal Home Loan Bank Capital Requirements

FHFA published, in Federal Register, the final rule to adopt, as its own, portions of the regulations of the Federal Housing Finance Board pertaining to the capital requirements for the Federal Home Loan Banks.

February 20, 2019 WebPage Regulatory News
News

PRA Publishes PS4/19 on Loss-Absorbency Mechanism Under Solvency II

PRA published a policy statement (PS4/19) that provides feedback on responses to the consultation paper (CP27/18) on adjusting for the reduction of loss absorbency where own fund instruments are taxed on write down under Solvency II.

February 20, 2019 WebPage Regulatory News
News

SRB Publishes Framework for Performing Valuations in Resolution

The framework provides independent valuers and the general public with an indication of the expectations of SRB on the principles and methodologies for valuation reports, as set out in the legal framework.

February 19, 2019 WebPage Regulatory News
News

BIS Paper on Effect of Securities Lending on OTC Market Liquidity

BIS published a working paper that studies how securities lending affects over-the-counter market (OTC) liquidity.

February 19, 2019 WebPage Regulatory News
News

US Agencies Extend Consultation Period for the Proposed SA-CCR

US Agencies (FDIC, FED, and OCC) extended the comment period for a proposed rule to update their standards for how firms measure counterparty credit risk posed by derivative contracts.

February 18, 2019 WebPage Regulatory News
News

FED Extends Consultation Period for Stress Testing Rule

FED has published in the Federal Register a notice proposing amendments to the company run and supervisory stress test rules.

February 15, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for February 2019

EBA published answers to two questions under the Single Rulebook question and answer (Q&A) updates for this week.

February 15, 2019 WebPage Regulatory News
News

SEC Proposes Rule on Risk Mitigation Techniques for Uncleared SBS

SEC proposed a rule that would require the application of specific risk-mitigation techniques to portfolios of security-based swaps (SBS) that are not submitted for clearing.

February 15, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 2623