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Credit Suisse, ING execute €25M securities transaction using blockchain technology

Leading global banks Credit Suisse and ING have conducted the first live securities lending transaction using blockchain technology.

The transaction involved swapping a basket of securities worth EUR 25 million using a collateral lending application from financial technology innovator HQLAx built using R3’s Corda blockchain platform.

In April 2017, R3, along with five of its consortium members and HQLAx, built an operating model for a digital collateral records (DCR) lending marketplace on Corda. The use of DCRs to effect transfers of securities can help enhance regulatory transparency, mitigate systemic risk, reduce operational risk, and help financial institutions manage capital more efficiently.

“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.,” Credit Suisse said in its media release.

According to the official release, law firm Clifford Chance helped to develop the legal architecture for transferring ownership of securities using Corda.

David E. Rutter, CEO of R3, commented, "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."

A blockchain initiative lead at ING told Reuters that the companies expect the application to be live by the end of this year.

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