ING, Credit Suisse complete $30mn securities lending transaction using blockchain

Using the HQLAx R3 Corda platform, leading European banks Credit Suisse and ING have completed a $30mn live lending securities transaction, marking a significant milestone for the use blockchain technology in traditional banking transactions.

The deal saw the two banks transferring Dutch and German government securities on the platform using digital collateral records (DCRs) that are used to enhance regulatory transparency, reduce risk and help institutions with the management of capital.

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“The success of this first live transaction speaks to the potential for blockchain technology to help improve collateral fluidity by creating a more efficient, transparent, and cost-effective marketplace for liquidity transfers,” said Romain Dumas, Head of Rates Repo and Collateral Optimization at Credit Suisse Securities Europe.

“As a provider of Transaction Banking services, it is of paramount importance to engage in technological change to understand and anticipate the future needs of our sophisticated client base,” said Paolo Muzzarelli, Head of Transaction Banking Products within Financial Institutions at Credit Suisse Switzerland.

Whilst the success of this venture shows progress in the implementation of blockchain technology in financial operations, the technology still relatively remains in its infancy, with it unlikely to be used widely in the near future.

“This transaction proves the progress we are making towards deploying Distributed Ledger Technology for the benefit of our clients and society by making the financial industry more efficient and more resilient,” said Ivar Wiersma, Head of Wholesale Banking innovation at ING. “With this strong group of participants, together with ING’s technical contribution, I’m confident about the path to production of the HQLAx platform.”