Clearstream is set to participate in testing of the European Central Bank’s Pontes distributed ledger technology settlement solution ahead of its planned launch on September 21.

The Deutsche Börse-owned post-trade infrastructure provider will conduct end-to-end testing covering settlement processes, connectivity and operational readiness, with clients also able to participate in testing. Clearstream says it is already planning tests with a number of partners across different use cases.

A particular focus will be interoperability between existing market infrastructures and DLT platforms, as well as delivery-versus-payment settlement in central bank money.

Pontes is the Eurosystem’s solution for connecting market DLT platforms with TARGET Services, allowing DLT-based wholesale transactions to settle in central bank money. The ECB says the infrastructure will support a dual settlement model, allowing transactions to settle using cash tokens on the Eurosystem DLT platform or through T2, its real-time gross settlement system.

The platform is designed to provide delivery-versus-payment across different infrastructures while retaining settlement finality in central bank money. It also aims to automate processing between DLT platforms and T2.

Clearstream previously participated in the Eurosystem’s exploratory work on wholesale central bank money settlement for DLT-based transactions. The company says the latest testing will help support interoperability and the development of a more harmonised European digital capital market.

The initiative is part of a wider Eurosystem programme aimed at developing infrastructure for tokenised wholesale financial markets while preserving the role of central bank money as the settlement asset.