In a joint, published on Tuesday June 25, the Central Bank of Luxembourg (BCL) and the Central Bank of France (Banque de France) celebrated the successful completion of the Venus Project. This pioneering digital bond issuance and settlement initiative leveraged distributed ledger technologies (DLT) and wholesale central bank digital currency (wCBDC). Led by the European Investment Bank and supported by Goldman Sachs, Société Générale and Santander, this collaboration aimed to demonstrate the feasibility and benefits of using wCBDC for the settlement of digital assets in the primary market.
Project Overview
As part of the the EIB issued a €100 million digital bond, underwritten by Goldman Sachs, Société Générale and Santander. The primary market transactions were facilitated through a two-stage process: first, the EIB and Goldman Sachs carried out a “delivery versus payment” (DvP) settlement, with Goldman Sachs then acting as lead arranger. This phase ensured that the CBDC was exchanged for the digital bonds in a transparent manner. Then, after the primary settlement, further transactions took place between Goldman Sachs and the secondary market investors of Société Générale and Santander, using the same digital settlement mechanisms.
Two distinct DLTs
The success of the Venus project is based on the integration of two distinct DLTs: the securities DLT and the cash DLT (DL3S). Operated by Goldman Sachs, the DLT Securities platform facilitated the issuance and registration of the EIB’s digital bonds, while DL3S, jointly developed by the Banque de France and the BCL, provided the infrastructure necessary to settle the transactions under the wCBDC.
Secure and efficient payments
Interoperability between these two DLTs was achieved through a sophisticated hashed time lock contract (HTLC) mechanism. This mechanism enabled instant settlements, ensuring that securities and cash DLT transactions were completed simultaneously and instantly, and therefore qualified as same-day (T0) settlements. This efficiency stands in stark contrast to traditional settlement cycles, which can take up to T+5 days.
Risk reduction through tokenization
By tokenizing Euro Central Bank Currency (CeBM), Project Venus has effectively reduced the credit, counterparty and market risks inherent in other forms of digital settlement assets, such as stablecoins, according to the release Press.
Legal Compliance
The banks also noted that the issuance of digital bonds under Project Venus complied with Luxembourg’s Dematerialized Securities Act 2013 and Mifid II regulations, ensuring legal clarity and investor protection.
Looking ahead, the success of Project Venus sets a precedent for future developments in digital capital markets across Europe, the BCL advocated. Continued cooperation and exploratory work within the Eurosystem will refine wCBDC solutions and address operational challenges for wider adoption, with conclusions from experiments and trials expected for the environment. the year 2025. The ultimate goal is to make wCBDC a reliable and resilient settlement asset in the evolving digital financial ecosystem, according to the press release.
This article was written by in English, translated and published by Paperjam in French.
