Clearstream and Eurex owner Deutsche Börse has presented a blockchain-based prototype built to support the settlement of securities.

The group, which is currently merging with the London Stock Exchange, has worked on the technology with Deutsche Bundesbank, Germany's central bank.

The system is designed to provide the technical functionality for the settlement of securities in delivery-versus-payment mode for centrally-issued digital coins, as well as the pure transfer of either digital coins or digital securities alone.

It is also capable of settling basic corporate actions such as coupon payments on securities and the redemption of maturing securities.

The pair plan to develop the prototype further over the next few months.

"We want to work together to find out whether this technology can be used for financial transactions, and if so, how this can be achieved,” said explained Carl-Ludwig Thiele, member of Deutsche Bundesbank's executive board.

Carsten Kengeter, chief executive of Deutsche Börse AG added: "Along with the Deutsche Bundesbank we are innovatively and creatively addressing potentially radical technological opportunities for the financial sector. 

"We will continue to do our utmost to leverage blockchain's efficiency potential and to better understand and minimise the associated risks of this technology."