Credit Suisse and ING in first seclending transaction using collateral lending app and blockchain
Credit Suisse and ING have completed the first live securities lending transaction settled using R3’s Corda blockchain platform. The two banks swapped baskets of securities with a value €25 million using the HQLAX Corda-based collateral lending application, which brings the app one step closer to production.
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’s entity in Switzerland.
In a traditional settlement of a securities lending transaction, individual underlying securities are transferred between accounts. However, the intent of the operating model for the HQLAX collateral lending application is to achieve a legal title transfer of baskets of securities through the transfer of ownership of the unique DCR-linked accounts themselves. Law firm Clifford Chance helped develop the legal architecture for transferring ownership of securities in this way using R3’s Corda blockchain platform.
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