Commerzbank, in collaboration with KfW Banking Group and MEAG, has successfully carried out a security transaction via a blockchain.

The participants jointly traded a Euro Commercial Paper (ECP) issued by KfW, and simultaneously replicated the transaction in a blockchain. The security was sold to MEAG, and settled without a paying agent or a clearing system. This pilot transaction comprised a €100,000 issuance volume with a five-day term.

According to the official release, the key elements of the transaction were replicated and simulated by means of R3’s Corda platform.

Commerzbank said that, in cooperation with other banks and R3, it developed an initial prototype of the Corda based platform. The pilot transaction was realised via an extension of this application.

"The pilot transaction has demonstrated that the issuing as well as the trading of securities can be simulated in real time via Blockchain technology. Transforming securities transactions into digital issues may open up significant potential for efficiency gains", said Roman Schmidt, Commerzbank's Divisional Board member for Corporate Finance.

Commerzbank further said that it work towards the “market readiness” of the new platform, with particular focus on embedding DLT in the regulatory framework, as well as adjustments with regards to the securities law. This, however, will involve further development of existing regulatory reporting interfaces.