Rabobank pilots blockchain commercial paper with Commerzbank and Euroclear – Ledger Insights

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This week, Rabobank announced that it has carried out its first real-time transactions on euro commercial paper using blockchain technology in a pilot project in the Netherlands with Commerzbank and Euroclear.

Dutch investors NN Investment Partners and PGGM have joined Rabobank Markets in the recent initiative. The project involved several one-million-euro commercial paper with a one-week maturity. Payments were recorded instantly on the Euroclear Bank infrastructure. Rabobank has been working on the pilot for two years, and successful completion of the trial means it will look to offer the service across Europe.

Blockchain technology offers the security and efficiency of instant settlement instead of the standard two business day lag. Where previously investors had to wait for payment if they sold the commercial paper, liquidity can now be managed in real time. A successful development will improve intraday liquidity for investors and businesses. It is hoped that the use of new technologies will help companies standardize and better manage cash flow and portfolio risk.

“Blockchain technology can increase the intraday liquidity of debt securities, which means our clients can manage their portfolio and liquidity risks in real time,” said Jacek Wieclawski, Head of Capital and Financial Markets Innovation. for Rabobank Markets. He added: “By leveraging the combination of blockchain and existing technologies, we have successfully created a new marketplace for our clients where government debt securities can be traded and settled instantly while keeping fund managers focused on managing investors’ money in real time. ”

Jurre Halsema, portfolio manager, money markets at NN Investment Partners, said the development “can not only create operational efficiency, but also further normalize a high-volume market and thereby improve liquidity and market access for all the parts”.

The solution uses R3’s Corda enterprise blockchain.

All over the world, there have been many commercial paper issues using blockchain. They understand India YES BANK and a separate consortium of EIB, Euroclear, Santander and EY set up two years ago. ID2S is a blockchain-based central securities depository owned by Orange and Citi, targeting commercial paper with several French participants. In China, Zheshang Bank issued $17 million in asset-backed commercial paper using blockchain in 2020.


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