Eurex Clearing has announced plans to become what it describes as the world’s first hybrid central counterparty (CCP), integrating traditional and digitally native securities within a single clearing framework, rulebook and risk model. The initiative will allow market participants to trade, clear and finance digital instruments using their existing clearing relationships and infrastructure.
Under the proposed model, digitally native securities, including bonds issued by the European Stability Mechanism (ESM), will become eligible for trading on Eurex Repo’s GC Pooling market, central clearing through Eurex Clearing and use as margin collateral. They will also qualify for inclusion in the ECB GC Pooling basket, providing access to established repo liquidity alongside conventional securities.The approach is designed to avoid the fragmentation of liquidity between traditional and blockchain-based markets while reducing the operational complexity associated with maintaining separate trading, clearing and collateral arrangements.
Laura Bayley, CEO of Eurex Clearing, says: “The future of financial markets is hybrid. Instead of creating isolated digital islands that fragment liquidity and trap capital, Eurex Clearing is building a bridge between both ecosystems. Our clients can seamlessly trade, clear, and finance native digital assets through the clearing relationship they already have – backed by one set of rules, one risk model, and one deep liquidity pool.”
Extending Digital Securities into Cleared Repo Markets
The announcement follows the ESM’s €1 billion digitally native benchmark bond issuance in October, the first transaction by a European supranational issuer to settle through the Eurosystem’s Pontes platform. The Deutsche Bundesbank acted as issuing and paying agent, with Clearstream providing the digital market infrastructure.Launched on 21 September, Pontes enables distributed ledger technology (DLT)-based securities transactions to settle in central bank money. The ESM transaction used Clearstream’s D7 DLT platform for the securities leg, with cash settlement processed through the Eurosystem’s TARGET infrastructure.
Eurex Clearing’s initiative extends the potential use of such instruments beyond primary issuance and settlement into central clearing, secured financing and collateral management.
It also builds on Deutsche Börse Group’s wider digital infrastructure strategy. In June, Clearstream unveiled its next-generation hybrid securities infrastructure, designed to accommodate traditional and tokenised assets within a common post-trade environment.
That same month, the European Investment Bank issued DLT-native commercial paper through Clearstream’s D7 platform. Eurex Clearing subsequently participated in mobilising the instrument through Clearstream’s triparty collateral management infrastructure for financing with the Bundesbank.
By incorporating digital securities into existing CCP arrangements, Eurex Clearing aims to extend established netting, risk management and default management processes to blockchain-based instruments. The development could help broaden institutional participation in digital securities markets by allowing firms to use familiar operational and legal frameworks while retaining access to established liquidity pools.
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