The two Swiss banking giants – and arch-rivals – teamed up on a first for blockchain in finance. Germany’s Deutsche Boerse was the midwife.
Financial technology company HQLAX and Deutsche Boerse carried out the first blockchain-based collateral swaps for securities lending, the German exchange operator said in a statement on Tuesday. It marks one of the first major transactions by banks as they come to grips with the relatively nascent distributed ledger technology.
Specifically, UBS and Commerzbank swapped baskets of German government bonds and corporate bonds, after which the Swiss wealth manager and Credit Suisse exchanged a basket of corporate bonds and one of German government bonds. The trades were recorded on HQLAX’s digital collateral registry, in lieu of physically moving securities between collateral agents.
Corda was built by R3, a joint effort of global experts supported by some 45 financial services firms, including UBS and Credit Suisse. Switzerland’s SDX plans to use Korda for its own digital asset infrastructure project.