Blockchain for Banking Capital markets News

Goldman, Citi, BNP, BNY back $17.5m Series B for blockchain collateral platform HQLAᵡ


Today HQLAX announced it raised a Series B funding round of €14.4 million ($17.5m) from BNY Mellon, Goldman Sachs, BNP Paribas Securities Services, Citigroup and Deutsche Börse Group.

Deutsche Börse Group is a partner in the collateral management solution and was an early major financial backer. The platform enables banks to trade High Quality Liquid Assets (HQLA), but speeds up the time-consuming settlement enabling intraday transaction settlement. Although custody of the asset remains with the original collateral agents, the change of ownership is registered on HQLAX‘s digital collateral registry.

“Deutsche Börse and HQLAᵡ have the same ambition: to enable financial institutions to mobilize their collateral and optimize their funding needs,” said Stephan Leithner, member of the Executive Board of Deutsche Börse and Clearstream Chairman.

Two of the four banking participants, Goldman and Citi were both previously announced as participants, with Goldman as a principal and Citi as a custodian.

Both BNY Mellon and BNP Paribas Securities Services are new Triparty Agents joining Deutsche Börse’s Clearstream, Euroclear, and JP Morgan. BNY Mellon will also act as Agent Lender and all four new investors will go live in 2021.

Another existing investor not mentioned in this round is ING, which committed funds in the first quarter of 2020 and was involved in the venture’s earliest stages alongside Credit Suisse. The Swiss Bank, UBS and Commerzbank executed live trades when the platform went into production in December 2019.

“HQLAᵡ’s innovative use of distributed ledger technology is a prime example of the important role transformational technologies can play in reshaping the financial system, and we are pleased to be investing in and partnering with the company,” said Mathew McDermott, Global Head of Digital Assets, Goldman Sachs.

Image Copyright: HQLA<sup>X</sup>