Blockchain for Banking Capital markets News

Deutsche Börse invests in HQLAᵡ blockchain

Deutsche Börse

Back in March Deutsche Börse Group announced a strategic partnership with HQLAX to launch a securities lending solution. Today the group announced it’s investing in the startup. The amount is less than Euro 10 million.

Previously the group invested in Digital Asset which is involved in the Australian Stock Exchange blockchain project.

In accordance with Basel III, banks have to hold sufficient High-Quality Liquid Assets (HQLA), to ensure liquidity in the financial system. Banks often lend securities that are part of their HQLA portfolios, and the partnership addresses this opportunity. Five months ago HQLAX ran its first live transactions with ING and Credit Suisse on the R3 Corda-based system.

Following the investment, the Deutsche Börse Group is entitled to two board seats on HQLAX. The positions will be taken by Philippe Seyll, who is responsible for the Group’s global securities lending business, and Jens Hachmeister, responsible for the Group-wide development of Blockchain initiatives.

Philippe Seyll, Co-CEO of Clearstream Banking SA, said: “Our goal is to create a standardized securities lending market together with like-minded partners like HQLAX. Improved compatibility between investment pools of different settlement systems or locations enables market participants to redistribute collateral more efficiently. ”

Guido Stroemer, CEO of HQLAX, commented: “This investment is a big step for HQLAX and reinforces Deutsche Börse Group’s commitment to our platform.”