Rabobank has successfully conducted a series of real-time euro commercial paper transactions as part of a blockchain pilot, showcasing the technology’s ability to offer borrowers and asset managers immediate liquidity.
The Dutch bank executed 19 transactions, totaling over €40 million in one-week maturity euro commercial papers denominated in EUR and GBP, using both fixed and floating formats. These transactions involved entities such as the Dutch State Treasury Agency, Rabobank Treasury in the Netherlands, Erste Bank in Austria, and UK-based asset manager Northern Trust Asset Management.
The transactions were executed, distributed, and settled in under 30 minutes, significantly faster than the standard two business days, thereby providing near real-time liquidity to Northern Trust Asset Management.
Trade economics and settlement instructions were confirmed and matched in real-time on a private-permissioned ledger platform developed by Rabobank, which was integrated into existing operational flows and legacy front-to-back risk systems. The securities were immediately issued and settled against fiat cash on Euroclear Bank’s infrastructure, coordinated with the issuing and paying agents, and soon to be aligned with the electronic trading venue of Tradeweb.
Regulators had dedicated access to the blockchain, enabling them to trace and track the pilot transactions in real-time.
Youssef el Mir, global head of trading at Rabobank, stated: “We believe the digitization of money markets can enhance liquidity and transparency at a critical time for the asset management industry. Our 2021 pilot was focused on proof of concept. These latest transactions, along with the solution we have collaboratively delivered, demonstrate that blockchain technology can be effectively integrated into financial institutions’ legacy systems with the right approach.”