Today the Deutsche Börse and Commerzbank announced a new Frankfurt-based digital asset venture 360x in which both companies will invest. The venture’s CEO and founder is Carlo Kölzer, who started the FX company 360T, acquired by Deutsche Börse in 2015 for almost $800 million. Kölzer is still with the group and is its Global Head of FX.
Initially, the focus will be on using blockchain to tokenize art and real estate with a minimum viable product (MVP) planned for later this year.
“Our mantra is ‘Making Things Investable – Bridging the Gap between Asset Classes and Capital Markets’. We create transparent and liquid trading venues for assets that have not yet existed in digital markets,” said Kölzer who emphasized that further asset classes will follow.
With the combination of partners, any platform will be regulatory compliant and offer an ‘orderly’ secondary market. One of the key benefits of tokens is to fractionalize assets so that an entry-level investment is comparatively small.
While blockchain aims to create trustless markets, that only really works with assets that are natively digital to a blockchain. As soon as you try to link a physical asset to a blockchain, it needs a trusted party to audit and confirm the linkage and ownership. Partners such as the Deutsche Börse should create that level of confidence. In fact, it already plays a similar role for HQLAX, the digital collateral registry platform.
To illustrate the importance of this trusted party, as a parallel in trade finance, many banks have been duped by people who have committed fraud with bills of lading and warehouse receipts, often getting credit multiple times.
Where Commerzbank comes in is as the payments partner. Additionally, a recent intern let slip that lending was part of the plans for 360x. Lending is one of the main applications in the DeFi space, mainly for cryptocurrencies.
“I am convinced that Deutsche Börse has to venture into new asset classes,” said Theodor Weimer, CEO of Deutsche Börse. “In the future, we will see a broad tokenisation and digitisation of assets that are not tradable today. 360X is the new innovative platform for serial marketplace creation that we are building with our partners.”
Both Deutsche Börse and Commerzbank have extensive experience in enterprise blockchain and distributed ledger technology (DLT). Both organizations recently participated in a trial by the German Bundesbank to settle blockchain securities transactions using the TARGET2 real-time gross settlement system (RTGS), which involved a trigger mechanism.