Banking News

DBS, Natixis, Raiffeesen in collateral tokenization blockchain trial

token tokenization

Yesterday, blockchain fintech Ivno said it completed a trial of its collateral tokenization platform. Three un-named securities exchanges were among 28 organizations that took part in the test. Eighteen banks were involved including CIB, DBS, Itaú Unibanco, National Bank of Canada, Natixis, Raiffeisen Bank International and U.S. Bank, among others.

Other participants included SBI R3, the joint venture between Japan’s SBI Holdings and R3, as well as technology firms Cobalt (FX) and Gateway DLT.

“The size, scale and success of the Ivno Global Trial validated Ivno’s technology and financial design and confirmed the desire and demand for live deployment. We welcome engagement with future customers of Ivno’s live service due Q1 2020,” said Daniel Halstead, Co-founder of Ivno.

The firm highlighted the three use cases that were tested — instant settlement, real-time collateral management and instant effective cash transfers.

Instant settlement involves atomic swaps which is the real-time exchange of tokenized assets. Because there’s no delay, counterparty risk is eliminated, and there’s no need for an intermediary. The simulation involved the transfer of ETF tokens for Ivno Collateral Tokens. We believe the latter is Ivno’s cash or cash equivalent (HQLA level 1) stable value tokens targeted at institutions and enterprises.

In the second use case of real-time collateral mobility, Ivno envisages enterprises and institutions using collateral tokens to transfer high-quality assets between branches and subsidiaries.

The final use case was instant effective cash transfer which involves organizations tokenizing internal cash so they can transfer cash between subsidiaries in a low-cost manner.

“It was amazing to see liquidity being tokenized and then transferred and settled globally within seconds using the Ivno Instant Settlement Corda Application.,” said Marin Karaga from Raiffeisen Bank International. “Liquidity management will enter a new era once products and services like Ivno go live.”

One of the significant potential benefits will be for treasurers with intra-day liquidity.

Ivno’s platform uses R3’s Corda blockchain, hosted on Microsoft Azure. Another firm using the same technology and targeting treasurers is Finteum. Last month, London-based Fnality said it might use the Utility Settlement Coin (USC) to instantly settle intraday foreign exchange swaps using the Finteum platform.

HQLAX also uses R3’s Corda for collateral mobility and has a major initiative with the Deutsche Börse.