Credit Suisse, ING Complete $30M USD Securities Transaction On Blockchain Platform

Announcements, Blockchain, Innovation | March 1, 2018 By:

Zurich-based financial services company Credit Suisse and Amsterdam-based ING Group have successfully transferred securities worth €25 million ($30M USD) over a blockchain platform.

During the pilot transaction, the banks agreed to transfer legal ownership of Dutch and German government securities on the platform, while the underlying securities remained static within “unique” DCR-linked custody accounts held by Credit Suisse and ING at Credit Suisse (Switzerland). The activity was executed on the R3 Corda blockchain using an application created by a company called ‘HQLAX.’ Law firm Clifford Chance advised the banks on the contractual and legal implications of conducting such a transaction.

The banks said the trade was one of the first examples of a real-life capital markets transaction of its kind taking place on a system that uses blockchain technology.

“In a traditional settlement of a securities lending transaction, individual underlying securities are transferred between accounts,” Credit Suisse said in its media release. “However, the intent of the operating model for the HQLAX collateral lending application is to achieve a legal title transfer of baskets of securities through the transfer of ownership of the unique DCR-linked accounts themselves.”

David E. Rutter, CEO of R3, said collateral lending is a great example of a process that can be revolutionized by blockchain technology, and this live trade between two major global banks marks a significant milestone for the market.

“We look forward to continuing our work with HQLAX and the banks to establish Corda as the de facto platform for high quality liquid asset management,” Rutter said.

Romain Dumas, Head of Rates Repo and Collateral Optimization at Credit Suisse Securities (Europe) Limited, said, the success of this first live transaction speaks to the potential for blockchain technology to help improve collateral fluidity by creating a more efficient, transparent, and cost effective marketplace for liquidity transfers.

Ivar Wiersma, Head of Wholesale Banking innovation at ING, said this transaction proves the progress they are making towards deploying blockchain for the benefit of their clients and society by making the financial industry more efficient and more resilient.