Deutsche Börse, which is a German capital market giant, created a dedicated ‘DLT, Crypto Assets and New Market Structures’ department for exploring the application of blockchain technology.
Deutsche Börse partnered with HQLAx
In one press release, the firm said that for a while, the markets giant Deutsche Börse was exploring different applications of the blockchain. This German-based exchange had co-operated with some international central securities depositories about how to use smart contracts for mobilizing scarce collateral and the creation of a functional prototype of a blockchain-based settlement of securities with Deutsche Bundesbank.
The managing director of the DLT, Crypto Assets, and New Market for Deutsche Börse, named Jens Hachmeister, said that the exchange was active with the blockchain in the first phase of ideation, as well as exploration. He added that they have invested in various initiatives to create a sound understanding of the trends, the technology, and the potential that it had within the traditional segments of their value chain.
Deutsche Börse also expanded its partnership with HQLAx, following an acquisition that was sealed after it performed an initial investment of a single-digit euro million in HQLAx – the liquidity, as well as collateral management firm building a blockchain based operating model for securities lending.
Deutsche Börse Group was afforded two board seats at HQLAx
Deutsche Börse Group, being part of the investment, was afforded two board seats at HQLAx with Philippe Seyll, as well as Jens Hachmeister as its representatives. Mr. Seyll is assumed to bring his expertise to bear on the board as the Global Securities Financing business of the group, while Jens is going to be saddled with the responsibility of overseeing blockchain initiatives.
The partnership was anticipated since March 2018, after Deutsche Börse announced its proposed collaboration with HQLAx in building a fully integrated operating model for security lending transactions, while still exploiting blockchain technology which was developed by the R3 consortium.
The on-boarding process with an initial set of banks started five months ago, and this was buoyed with detailed discussions with some relevant regulatory authorities. Also, plans are geared towards acquiring some further shareholding as the year is going to end soon.
The collaboration will enable creating a true blockchain-solution
The co-CEO of Clearstream Banking, named Phillip Seyll, commented that this collaboration is going to allow them to create a right blockchain-based solution in the post-trade arena. Together with like-minded partners like HQLAx, he said that they want to create a standardized lending marketplace.
Furthermore, he pointed out the significance of the collaboration in the efficient redistribution of collateral liquidity.
He said that it is going to permit market participants to redistribute collateral liquidity more efficiently by improving interoperability for pools of securities which are residing in multiple, disparate settlement systems, as well as locations.
The R3 Corda platform is not new to HQLAx. The company successfully initiated the first securities which are the lending transaction between Credit Suisse and ING with the usage of the R3 Corda platform.