Deutsche Boerse Acquires Minority Stake In Blockchain Firm HQLAx

News | August 29, 2018 By:

Frankfurt-based exchange group Deutsche Börse has acquired a minority stake in HQLAx, a provider of liquidity solutions to institutional investors.

Deutsche Börse is a marketplace organizer for the trading of shares and other securities. It gives companies and investors access to global capital markets. As a technology innovator, Deutsche Börse started a number of blockchain-related initiatives more than three years ago. These include, amongst others, an investment in Digital Assets Holdings.

Deutsche Boerse’s initial investment of a “single-digit euro million” amount in HQLAx comes five months after the two firms revealed that they are working together to develop a securities lending solution using R3’s Corda blockchain platform. Deutsche Boerse said it is likely to acquire further share holdings in HQLAx around year-end.

As part of the investment, Deutsche Börse Group will have two of their own employees on the HQLAx board. Philippe Seyll, who is in charge of the group’s Global Securities Financing business, and Jens Hachmeister, responsible for the development of blockchain initiatives across the group, were named as the two new board members.

“This collaboration will enable us to create a true blockchain-based solution in the post-trade arena,” said Seyll. “Together with like-minded partners such as HQLAx we want to create a standardized lending marketplace. It will allow market participants to redistribute collateral liquidity more efficiently by improving interoperability for pools of securities residing in multiple, disparate settlement systems and locations.”

The HQLAx platform improves collateral fluidity with an operating model that does not require securities to be moved across central securities depositories (CSD). According to Deutsche Börse, the blockchain securities lending project has already seen the beginning of the on-boarding process with an initial set of banks, while discussions with relevant regulatory authorities are also taking place.

“This investment represents a major milestone for HQLAx, and it is another example of Deutsche Börse Group’s strong commitment to our platform,” said Guido Stroemer, CEO of HQLAx. “We look forward to our journey into production.”