Credit Suisse and ING transfer government securities over blockchain
The underlying securities remained static in linked custody accounts held by Credit Suisse and ING.
Swiss multinational financial services company Credit Suisse and Dutch-based bank ING have completed a live securities lending transaction valued at more than US$30 million, settled using blockchain technology.
The transaction utilized the Corda blockchain. Financial innovation company R3 and a consortium of global banking institutions joined forces in mid-2016 to demonstrate how distributed ledger technology (blockchains) can transform trade financing for modern financial markets.
Credit Suisse and ING transferred legal ownership of Dutch and German government securities, worth €25 million (US$30.5 million) using HQLAx Digital Collateral Records (DCRs). However, the underlying securities remained static in linked custody accounts held by Credit Suisse and ING at Credit Suisse in Switzerland.
“The use of DCRs to effect transfers of securities can ultimately help enhance regulatory transparency, mitigate systemic risk, reduce operational risk, and help financial institutions manage capital more efficiently,” Credit Suisse said in a statement.
The DCR model was initially launched by HQLAx in April last year and is still in a testing phase.
ING blockchain lead Herve Francois told Reuters that he expects the application to be live by the end of 2018.
Popular American coffeehouse chain Starbucks is mulling the idea of utilizing innovative blockchain technology to process future payments, as well as the possibility of developing its own native digital currency.
Leading financial regulation authorities in the United States and United Kingdom have partnered to collaborate on a range of studies that will focus on advances within the burgeoning financial technology (fintech) industry.
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