HQLAᵡ blockchain collateral management readies for November launch

Today HQLA^X announced plans to go live with its distributed ledger platform in November. The Luxembourg startup enables efficient securities lending by allowing a transfer of assets or collateral swaps through a digital collateral registry. The platform was jointly developed with the Deutsche Börse Group, which is also an investor in HQLA^X. Banks swap different qualities of assets to ensure they stay in compliance with Basel III capital adequacy requirements. The purpose of HQLA^X is to reduce the friction in the process. As it prepares for launch, HQLA^X executed several simulated trades with ING, Commerzbank and other global banks. Generally, with a collateral swap, the custody of the collateral would need to be moved. Instead, by using the digital collateral registry, the underlying basket of assets remain off-blockchain and untouched with the original custodian. In the simulation, the assets resided at Clearstream Banking (owned by Deutsche Börse) and Euroclear Bank.

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