Tokenised HQLA Securities Trading

Target 

Financial Institutions 

Problem

Financial institutions trade with each other in high quality liquid assets on a daily basis, but the trade is inefficient and costly due to lack of available technology and the separate financial settlement process. 

Solution

Market adoption of distributed ledger technology to tokenise the HQLA securities and enable atomic settlement using CBDC for faster, cheaper, lower risk trading. 

CBDC Leverage

Tokenised value to enable atomic, risk-free settlement. 

The Opportunity

Wholesale debt capital markets and money markets may be made more efficient, transparent and accessible (to all participants – both issuers and investors) by market adoption of distributed ledger technology allowing for atomic settlement using CBDC. If financial and technical risks can be reduced, more marketplaces for tokenised assets could be established at lower cost and regulatory burden. The pilot enables an existing market operator to achieve ‘delivery versus payment’ on securities that fund the banking system. Market participants control the ownership and movement of funds to enable financial clearing and settlement at reduced costs, without any financial risks from a intermediary. 

Pilot

The use case demonstrated atomic settlement of major bank certificates of deposit issued by and traded between two authorised deposit-taking institutions (ADIs), Westpac and CBA. Participants controlled the ownership and movement of pilot CBDC. Each trade was individually settled with pilot CBDC enabling financial clearing and settlement at reduced costs, and no counterparty risk

Australian CBDC Pilot Conference presentation