Deutsche Boerse Plans Blockchain Securities Platform for Eurex

German Group to cooperate with UK HQLAx for using the technology behind Bitcoin.

by Marin Marinov
26 March • 2 min
In Tech

Deutsche Boerse Group, the owner of Eurex exchange has teamed up with UK liquidity and collateral management firm HQLAx to launch a blockchain-based securities lending platform, both companies announced on Monday. The German financial group and the British fintech firm will form a strategic partnership for using the blockchain platform of US R3 software maker Corda, the companies said in a statement.

Under the agreement, the platform will be used in Eurex Repo, the financial service of Deutsche Boerse Group subsidiary Eurex. It will be a fully integrated front-to-back operating model to facilitate more efficient collateral management of high quality liquid assets (HQLA).

a man in front of big picture with personal computers

“These assets are in heightened demand due to the implementation of bank regulations for liquidity, mandatory clearing and margin requirements for OTC [over-the-counter] derivatives,” the statement explained.

The new blockchain-based solution will work as a post-trade control layer.

“With the creation of a neutral custody agnostic control layer, Deutsche Boerse is embracing distributed ledger technology and complements it with a neutral and trusted market infrastructure role open to multiple custodians and collateral agents,” executive manager Philippe Seyll said.

Blockchain technology

HQLAx has had experience in both securities lending and blockchain. It has used R3 Blockchain to develop a service for legal transfer of securities between custody accounts without the physical movements of assets. This solution has been used in the first live securities lending transactions between Credit Suisse and ING.

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Blockchain is part of the revealed strategy of Theodor Weimer, the new CEO of the Deutsche Boerse Group. Weimer, however, is cautious about Bitcoin, German newspaper Handelsblatt has reported.

Blockchain is the open distributed ledger technology (DLT), developed for the creation of Bitcoin (BTC) in 2008. Its usage has broadened since to many industries, from traditional financial services to medicine. Many experts believe that the blockchain technology is more important than the cryptocurrencies that it enables.