Switzerland’s Credit Suisse Group and Dutch-based ING Groep have successfully implemented blockchain technology in a securities lending deal worth 25 million euro ($30.6 million). The banking giants used the HQLAx securities lending application, which is based on the Corda platform provided by blockchain consortium R3.
During the transaction, the banks exchanged ownership of German and Dutch government securities via the HQLAx app. This was among of the first instances of distributed ledger technology being used for a live transaction in the capital markets. The so-called Digital Collateral Records (DCRs) utilized in HQLAx’s CorDapp are seen as capable of increasing regulatory transparency, reducing systemic and operational risks, and streamlining capital management, the companies said.
R3 managing director Charley Cooper told Reuters:
“This was far more than a proof of concept in a fenced lab. These are regulated institutions in a real market and it is a unique demonstration that blockchain solutions are being deployed in commercial settings.”
R3 is a blockchain consortium that includes over 70 banks and is run by New York-based company R3 CEV. In October, it released an updated version of its Corda platform..
Credit Suisse and ING anticipate that HQLAx’s application will go live by the end of 2018, Herve Francois of ING said.
The blockchain-based app could cut transaction time from days to seconds, the companies noted.
Ivar Wiersma, head of innovation for ING Wholesale Banking, statedl:
“This transaction proves the progress we are making towards deploying Distributed Ledger Technology for the benefit of our clients and society by making the financial industry more efficient and more resilient. With this strong group of participants, together with ING’s technical contribution, I’m confident about the path to production of the HQLAX platform.”
Last week, we reported that ING hosted a banking account that belongs to crypto exchange Bitfinex.