Deutsche Börse said it plans to develop a system that can offer securities settlement, and will use technical support from financial management company HQLAX and blockchain startup R3s Corda platform.
The exchange explained that the move comes due to a fragmented global securities system that incurs higher operational costs, while lowering settlement fluidity.
These assets are in heightened demand due to the implementation of bank regulations for liquidity, mandatory clearing and margin requirements for OTC derivatives.
HQLAX and R3 have already developed a solution for securities lending in partnership with Credit Suisse and ING.
Using the solution, the banks completed a transaction of USD 30 million-worth of securities over a blockchain-powered platform in early March, following a proof-of-concept conducted in 2017.
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