Deutsche Börse Group has formed a strategic partnership with HQLAx for the creation of a new securities lending solution using the R3 Corda blockchain platform.

Using blockchain technology, the two firms will build a fully-integrated operating model to facilitate more efficient collateral management of high quality liquid assets. Due to the implementation of new bank regulations for liquidity, mandatory clearing and margin requirements for OTC derivatives, liquid assets are growing in demand.

According to the most recent Basel III Monitoring Report, the global banking industry reported holdings of €11.95 trillion of high quality liquid assets.

Deutsche Börse’s Eurex Repo platform will deliver the trading layer exclusively, and will also assume a lead role in custody agnostic, post-trade processing layer – which is designed to interoperate with multiple collateral agents and custodians.

Philippe Seyll, executive manager at Deutsche Börse Group, commented: “With the creation of a neutral custody agnostic control layer, Deutsche Börse is embracing distributed ledger technology and complements it with a neutral and trusted market infrastructure role open to multiple custodians and collateral agents.

Guido Stroemer, CEO of HQLAx, added: “Our goal is to mobilise liquidity across pools of collateral currently residing in disparate custody accounts around the globe. Partnering with Deutsche Börse Group enables us to maximise the network effect that will drive widespread adoption of the HQLAX platform. We look forward to further collaboration with the broader community of collateral agents and custodians.”

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