Delta Capita, Montis explore deposit tokens, wholesale CBDCs in expanded partnership

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Archax subsidiary Montis Group Limited and financial services firm Delta Capita have announced the expansion of their commercial partnership, focusing on exploring a range of blockchain offerings.

Both entities have confirmed signing an in-principle agreement to roll out new products across four market infrastructure areas, stressing that the recent push stems from the initial successes of their previous collaboration in 2023.

As stated in their joint statement, the involved companies will share resources to explore settlement optimization in Eurosystem markets and support European-listed warrants. The agreement also entails examining wholesale central bank digital currencies (CBDCs) and deposit tokens within the ambit of delivery versus payment.

In achieving these objectives, the partnership will leverage Delta Capita’s proprietary MACH technology, which Montis is utilizing to improve its CSD offering.

Montis CEO Martin Watkins noted that its digital CSD system built on the MACH will support digital asset issuance and secondary trading on its platforms, providing liquidity management and military-grade security.

Montis’ incoming CSD system, expected to be rolled out in mid-2024, is seeking regulatory approval from European authorities. With the U.K.’s Digital Securities Sandbox underway, Montis is one step closer to achieving the regulatory greenlight to launch its offering commercially.

Available reports indicate that Montis’ incoming CSD will be agnostic, supporting several distributed ledgers, including Hedera, Algorand, and Ethereum. There are plans to expand support to other publicly distributed ledgers in the future, hinged on adopting the CSD system.

“We believe that all assets are moving on-chain, so the regulated infrastructure needs to be ready for that moment,” said Watkins. “Montis is ahead of the curve and with all the largest financial institutions agreeing that tokenization is the future, we are perfectly placed to meet the rapidly increasing demand.”

Deposit tokens and wholesale CBDCs take shape in Europe

Several jurisdictions in the European Union are already exploring the concept of deposit tokens, with German and Swiss commercial banks launching trials to test new use cases.

Central banks across the EU are ramping up wholesale CBDC digital euro trials, with the Banque de France leading the charge. Banque de France Deputy Governor Denis Beau noted that CBDCs should support tokenization use cases to remain relevant in modern times or risk falling behind the pecking order to stablecoins.

“If we do not adapt central bank money to this evolving landscape, meaning if central bank money cannot be used to settle tokenized transactions, industry participants may turn to alternative settlement assets, such as stablecoins,” said Beau.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: CBDCs are more than just digital money