Stuttgart, February 19, 2019 - The Blockchain expert targens is in charge of the technical implementation for the first digital issuing platform for Asset Backed Commercial Papers (ABCP) based on the Distributed Ledger Technology (DLT) Corda. The purchase and repayment of a money market security with a volume of EUR 1 million, and a term of five days was processed entirely through Corda-R3-Distributed Ledger Technology.
"We have already demonstrated the added value of Blockchain in the financial sector together with our parent company Landesbank Baden-Württemberg (LBBW) by issuing several promissory notes”, says Marcus Karcher, Senior Manager Digital Finance at targens. "The first legally effective transaction of an ABCP based on DLT is now another significant step on the road to digitizing the financial industry."
The ABCP is a short-term bond backed with trade receivables of medium-sized companies and leasing receivables, which is a very popular liquidity management instrument among institutional investors and large companies. Compared to this new approach, the current paper-based transaction process is very complex and time-consuming. The use of DLT now enables the execution of lean and direct transactions between the issuer and investor without the need for additional intermediaries. This also reduces the processing time from two days to less than one hour. The use of Smart Contracts simultaneously reduces both the respective settlement risk, as well as operational risks during the settlement.
Thereby, Distributed Ledger Technology stores all transactions in concatenated data records on multiple servers, which makes any kind of manipulation virtually impossible, and provides a full transparency for all parties involved in the transaction. Now, the aim is to open up the newly developed DLT platform for further interested investors.
"As a member of the Corda Partner Network, we at targens are highly convinced of the advantages DLT offers. We are therefore extremely pleased that we can now demonstrate the benefits of this amazing technology with such a market-ready product”, concludes Karsten Treiber, Director Digital Finance at targens.