Today the Deutsche Börse Group
confirmed that in December it made an additional investment in
HQLAX which is a blockchain solution targeting the securities lending market. Deutsche Börse first revealed its collaboration with HQLA
X in March 2018, and subsequently
invested in August of that year. The solution, also called HQLA
X , is based on R3’s Corda and uses blockchain to facilitate efficient and high-speed trading of High-Quality Liquid Assets (HQLA). Banks are required by law to hold a certain amount of HQLAs so that they have quality assets which they can sell quickly when needed.
After comprehensive tests, Deutsche Börse has touted the project’s ‘significant progress’. Six banks have apparently started the on-boarding process and will join the platform when it launches. The system is likely to go into production during the first half of 2019. Both the technical development and the legal and regulatory framework are nearing completion.
How it works
Crucially, no securities will actually change hands on the platform. Instead, tokens that represent the securities will be transferred between parties, while the underlying assets will remain off-blockchain and untouched. The aim is to provide greater efficiency and enable collateral to move been different systems and jurisdictions.
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