Deutsche Boerse Acquires Further Shares In Blockchain Liquidity Solution Provider HQLAX

Blockchain, Investing, News | January 30, 2019 By:

Frankfurt-based exchange group Deutsche Börse has acquired a second tranche of shares in HQLAX, a provider of liquidity solutions to institutional investors, to further strengthen its ties with the company.

In March 2018, the Frankfurt-based exchange group partnered with HQLAX for a securities lending offering based on R3’s Corda blockchain solution. The securities lending solution aims to facilitate more efficient collateral management of high-quality liquid assets (HQLAs), which are in heightened demand due to increased clearing and margin requirements under Basel III regulations. Deutsche Börse acquired a minority stake in HQLAx in August and acquired more shares last month.

In an update posted on its website, Deutsche Börse reported that its securities lending solution is “making significant progress.” It said that the technical set-up of the solution is close to final, as is the legal and regulatory framework. In addition, six banks already confirmed that they have started their onboarding processes and will join the platform at launch date, which is expected in the first half of 2019.

“The interest and commitment shown by the market prove that blockchain can bring tangible benefit to our industry,” said Guido Stroemer, CEO of HQLAX. “In Deutsche Börse we found the perfect partner to exploit this potential. The increased shareholdings confirm their strong commitment to our business and the joint solution.”

The securities lending solution, which will be accessed via Deutsche Börse’s Eurex Repo trading system, will enable market participants to redistribute liquidity more efficiently by providing collateral mobility across systems and locations. It will allow the transfer of tokens between custody accounts, keeping the underlying securities off-blockchain.

“This blockchain use case reveals the significance and potential of the technology. This creates higher liquidity, transparency and efficiency for financial markets in general and securities financing in particular,” said Jens Hachmeister, in charge of blockchain initiatives across Deutsche Börse Group. “We look forward to applying DLT for further solutions along the whole value chain.”