ING and Credit Suisse Finalize First Securities Lending Transaction via Blockchain
Recently, leading global banks have shown increased interest in blockchain technology, and many have even entered beta-testing phases of blockchain-based projects. One such example includes ING and Credit Suisse, two major global banks, who have recently conducted the world’s first live securities lending transaction using the technology.
Reports indicate that the transaction worked by swapping securities worth EUR 25 million, by using a collateral-based, lending application built via the Corda blockchain platform. To put things better into perspective, back in 2017, the R3 alongside its consortium members, managed to build a digital collateral records lending marketplace, directly on Cordana. The purpose of the DCR would be to help securities transfers, while also reducing risks, improving regulatory transparency, and lastly, helping financial institutions manage their capital in a more efficient manner.
In a recent press statement, Credit Suisse mentioned that: “During the transaction, Credit Suisse and ING agreed to transfer legal ownership of Dutch and German government securities on the platform using HQLAX Digital Collateral Records (DCRs) while the underlying securities remained static within unique DCR-linked custody accounts held by Credit Suisse and ING at Credit Suisse (Switzerland) Ltd.”
The CEO of R3, David Rutter, also stated that: "Collateral lending is a great example of a process that can be revolutionised by blockchain technology, and this live trade between two major global banks marks a significant milestone for the market. We look forward to continuing our work with HQLAX and the banks to establish Corda as the de facto platform for high quality liquid asset management."
Following the successful transaction, it is expected that the two financial institutions will continue using the technology, for quicker, more secure and more transparent transfers of securities.
At this moment in time, both institutions are involved in a variety of blockchain-related projects, hence pioneering the future of the financial market.