Czech National Bank completes DLT bond issuance trials with CSD Prague
Key points
- The Czech National Bank completed live DLT bond issuance trials using CSD Prague, the first infrastructure licensed under the EU DLT Pilot Regime.
- Česká spořitelna was the sole commercial bank counterparty in the tests, which were conducted through the CNB Lab.
- Bond denominations were set at CZK 10,000 (around $453) per unit, though the trial scope covered purchases, sales, interest payments, and repo transactions.
- Repo using CNB bills as collateral was tested, directly touching a core CNB monetary policy instrument, with all transactions settling near-instantaneously.
- CNB Governor Aleš Michl has stated that central bank money must underpin settlement, but the CNB has not disclosed how the koruna cash leg was handled, since the eurozone's Pontes platform covers only euros.
The Czech National Bank (CNB) has finished a series of live tests involving the issuance of its own digital bonds on a distributed ledger infrastructure, marking a substantive step in central-bank experimentation with tokenised debt in Central Europe. The platform hosting the trials was CSD Prague, the country’s central securities depository and the first infrastructure to receive a licence under the European Union’s DLT Pilot Regime. Česká spořitelna, a local commercial bank, acted as the sole counterparty.
Despite the trials being conducted at a deliberately modest scale, with individual bond denominations set at CZK 10,000 (approximately $453), the operational scope was broad. Run through the CNB Lab, the tests covered purchases, sales, interest payments, and repo transactions, with all settlements completing near-instantaneously. The inclusion of repo using CNB bills as collateral is particularly notable: this instrument sits at the heart of the CNB’s monetary policy toolkit, so testing its execution over a distributed ledger carries real operational weight.
One open question the trials leave is how the cash leg was settled. CNB Governor Aleš Michl stated that central bank money must anchor the settlement process, yet the CNB has not disclosed the mechanism used for the koruna cash side. The Eurosystem’s Pontes platform, which supports wholesale central bank money settlement in the eurozone, only handles euros, meaning any production-grade Czech koruna solution would require a separate domestic route. How the CNB addresses that gap will shape whether these trials evolve into an operational programme.