Following an undisclosed funding into Hqlax from Dutch multinational financial institution ING on March 6, Cointelegraph spoke to Nick Quick, the COO of tokenized securities agency.
Quick describes ING as one of many firm’s “longest-standing strategic companions,” emphasizing that the 2 corporations have collaborated in growing and testing Hqlax’s tokenized securities platform for over two years.
The 2 corporations first partnered in 2017, with Hqlax launching an initiative to “develop DLT-driven options for extra environment friendly and cost-effective liquidity administration and collateral administration within the international securities financing markets” alongside enterprise blockchain agency R3 and 5 banks together with ING.
ING conducts first dwell transaction on Hqlax platform
In early 2018, ING and Credit score Suisse executed a dwell transaction on the Hqlax platform — swapping securities baskets valued at practically $28 million utilizing the applying.
The Hqlax platform went dwell throughout December 2019, with ING’s blockchain group growing the preliminary model of the applying.
The platform permits traders to redistribute collateral by exchanging possession of tokenized securities on Corda’s blockchain with out requiring the motion of the underlying property.
Nick Quick describes the platform as “facilitating extra environment friendly collateral administration of each high-quality liquid property (HQLA) and non-HQLA through [a] four-layer working mannequin,” explaining:
“The digital collateral registry layer permits delivery-versus-delivery (DvD) possession transfers of baskets of securities through digital collateral data (DCRs). This eliminates the present, operationally onerous, requirement to transfer securities from one custody location to one other. We make this doable through integration with the main Eurex Repo F7-trading system the place Hqlax platform transactions are executed, and a Deutsche Börse-owned Trusted Third Get together (TTP) entity, which connects the custodians/tri-party brokers to the digital collateral registry.”
Quick indicated that Hqlax plans to solely goal institutional purchasers, stating that they don’t have any present plans for the retail market, including that, “We stay centered on the numerous alternatives that we see to allow frictionless possession transfers of property for establishments.”
Hqlax to onboard extra banks throughout 2020
Wanting to the remainder of 2020, Quick states that Hqlax is at present onboarding Commerzbank, Credit score Suisse, UBS, and a number of other different monetary establishments onto the platform.
The corporate additionally plans to add extra custody areas beginning with J.P. Morgan, which Quick states “is within the technique of turning into the third tri-party agent within the Hqlax working mannequin, alongside Clearstream Banking S.A. and Euroclear Financial institution.”
Quick additionally mentioned that Hqlax will look to develop its merchandise to handle particular “ache factors” within the securities lending markets, together with collateral improve and downgrade transactions, digital collateral re-use, and intraday buying and selling.