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.
“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.”
Start-ups receive $60 billion investment, smash 2020 record
Start-ups on the continent have raised a massive 43.8 billion euros ($60.9 billion) in just the first six months of 2021, according to figures from Dealroom, surpassing the record 38.5 billion euros invested last year..
This is despite the fact that the number of venture deals signed so far is around half the amount agreed in 2020. Only about 2,700 funding rounds have been raised so far this year, compared to 5,200 last year.
Prime examples in times of change
Examples are Swedish buy-now-pay-later firm Klarna which has raised more than $1.6 billion in two financing rounds, the German stock trading app Trade Republic received $900 million in May and British payments provider Checkout.com snapped up $450 million at the start of the year.
The figures suggest that European tech firms are pulling in far larger sums of money per investment than in previous years, which defies the economic uncertainty of the pandemic and boosted online services enormously.
The CEO of Checkout.com, Guillaume Pousaz, said start-ups have often been created in times of crisis, citing the emergence of several new financial technology companies in the wake of the 2008 global financial crisis.
He added that big transformational change was often the time when there is the emergence of a lot of new start-ups, sometimes when people are losing their jobs for associated reasons.
UK leading the charge
Scale-Up Europe, a group that includes the founders of UiPath and Wise, proposed 21 recommendations to help the region build “the next generation of tech giants.” Among the suggestions are tax credits to corporates for investing in start-ups and regulatory changes that adapt to new innovations.
Sebastian Siemiatkowski, CEO of Klarna, said the U.K. leads Europe when it comes to tech policy, and that there were a number of regulatory issues needing to be addressed before the European Union can produce tech giants of its own.
Siemiatkowski highlighted EU regulation of web cookies as an example of “poor regulation.” Yet, as the number of $1 billion start-ups in Europe continues to grow, the number of exits in the continent is also increasing.
This year has already seen some notable acquisitions, including Etsy’s $1.6 billion purchase of U.K. fashion resale app Depop and JPMorgan’s takeover of London robo-advisor Nutmeg.
As for stock market listings, a number of notable debuts have taken place in London in particular, including food delivery app Deliveroo, cybersecurity firm Darktrace and reviews site Trustpilot. Money transfer giant Wise, formerly known as TransferWise, plans to go public in the U.K. capital soon.