Clearstream will invest in Digital Vault Services

FRANKFURT: Clearstream, the post-trade arm of Deutsche Börse, has announced its intention to invest in Digital Vault Services (DVS), a trailblazing fintech company specializing in the issuance and secure storage of digital bank guarantees and sureties.

This strategic investment, which hinges on the receipt of regulatory approvals and the completion of legal agreements, is poised to significantly enhance DVS’s capabilities as a provider of market infrastructure solutions for corporations and financial institutions.

Jens Hachmeister, Head of Issuer Services & New Digital Markets at Clearstream, said: “Digital leadership is a central part of Deutsche Börse Group’s Horizon 2026 strategy.

The companies’ shared commitment to market innovation makes DVS a perfect fit for Deutsche Börse and Clearstream.

We are convinced that DVS’s innovative approach to digital bank guarantees, combined with D7’s track record in digitising securities and Clearstream’s central role in global financial markets, will drive significant growth and deliver value for our clients and ultimately the entire financial industry.”

The collaboration is set to culminate in the integration of DVS’s Guarantee Vault with Deutsche Börse’s digital post-trade platform, D7, marking D7’s inaugural foray into the digital asset realm beyond securities.

This synergy between DVS’s robust European presence and Clearstream’s extensive experience in offering market infrastructure solutions is expected to inject unprecedented value into the trade finance ecosystem, benefiting corporates, banks, and insurers alike.

Ludger Janssen, Co-CEO of Digital Vault Services, added: “Clearstream has emerged as a strategic ally for DVS, echoing our dedication to streamlining processes and recognizing the transformative potential of digitisation in the financial industry, in particular with regards to guarantee management.

With technology as our foundation, together with Clearstream and our central and digital guarantee registry, we foresee a unique end-to-end solution that disrupts and modernises outdated procedures with unparalleled efficiency.”

The transaction, which will see Clearstream acquire a minority stake in DVS, is anticipated to reach completion in the second half of 2024, contingent upon the necessary regulatory consents and legal formalities.

Jaime Gimeno, Co-CEO of Digital Vault Services, added: “Back in 2018, when designing a solution to the cumbersome paper-based process for issuing and storing guarantees, we took inspiration from the central securities depository model used in the securities industry.

This strategic partnership with Clearstream now represents a major milestone in our growth journey towards becoming the recognized market infrastructure solution for guarantees in Europe. As we move forward the partnership also positions DVS for exciting new use cases and instruments.”

Digitization: A New Era for Financial Markets

The current financial markets are characterized by fragmentation and reliance on isolated technological systems, leading to inefficiencies, high error rates, and elevated costs for participants. Digital solutions are emerging as a remedy to these challenges, fostering connections across networks and market players, thereby enhancing transparency, efficiency, and technological interoperability.

Deutsche Börse and Clearstream are at the forefront of this digital revolution with their D7 platform, offering a fully digital alternative to the traditional physical processes involved in issuing and managing financial securities. This innovation drastically reduces the time-to-market for securities, transforming the process from a matter of days to mere minutes.

DVS’s Guarantee Vaults product complements this digital shift, enabling corporates to centrally issue and store bank guarantees that are essential across various industry segments.

As an integral component of the global markets, Clearstream stands out as an innovative and reliable post-trade service provider. It administers the German and Luxembourg central securities depositories, as well as an international central securities depository catering to the Eurobonds market. With an impressive €18 trillion in assets under custody, Clearstream ranks among the largest settlement and custody firms globally.

Moreover, Clearstream excels in delivering top-tier fund execution, distribution, data, and reporting services, spanning over 55 fund markets worldwide. As a member of the Deutsche Börse Group, an international exchange organization known for its innovative market infrastructures, Clearstream is well-positioned to lead the charge in the digitization of financial markets.

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