Deutsche Börse Group and HQLAX have signed a Letter of Intent to form a strategic partnership for the creation of an innovative securities lending solution using the R3 Corda blockchain platform back in March 2018.
Later on, Deutsche Börse Group has made an initial investment of a single-digit euro million amount in HQLAX S.à r.l. in exchange for a minority shareholding. In December 2018, Deutsche Börse acquired a second tranche of shares in HQLAX to further strengthen its ties with the company.
The development of the HQLAX target operating model has almost come to its end. The platform launch is expected in H1 2019. Six banks have already confirmed that they will join the platform.
Tokens will be transferred while the underlying securities will be kept off-blockchain and remain static. Clients will have platform access via Deutsche Börse’s Eurex Repo trading system.
Guido Stroemer, CEO of HQLAX , said:
The interest and commitment shown by the market prove that blockchain can bring tangible benefit to our industry. In Deutsche Börse we found the perfect partner to exploit this potential. The increased shareholdings confirm their strong commitment to our business and the joint solution.
Jens Hachmeister, in charge of blockchain initiatives across Deutsche Börse Group, commented:
This blockchain use case reveals the significance and potential of the technology. This creates higher liquidity, transparency and efficiency for financial markets in general and securities financing in particular. We look forward to applying DLT for further solutions along the whole value chain.
Clearstream, Deutsche Börse Group’s post-trading services provider, will act as custodian.
Philippe Seyll, CEO of Clearstream Banking S.A., added:
We are thrilled to see the progress of the platform. It shows the technology’s potential to enhance collateral liquidity management by lowering obstacles between different systems and locations.