Market Infrastructure Giants to Tap DLT for Collateral Management

Deutsche Börse and a number of central securities depositories are working to build a blockchain solution for collateral management.

AccessTimeIconJan 19, 2017 at 12:00 p.m. UTC
Updated Sep 11, 2021 at 1:00 p.m. UTC

A group of central securities depositories (CSDs) is working with stock exchange operator Deutsche Börse on a new blockchain-based solution aimed to improve collateral management.

CSDs from Canada, Luxembourg, Norway and South Africa – all members of the Liquidity Alliance – are working with the stock exchange firm to create what they have dubbed the “LA Ledger”. The initiative is currently in the prototyping phase, using the code underlying the Hyperledger project as its basis.

The firms involved are looking to seek approval for the solution from regulators later this year, according to statements – a process that could begin as early as the second quarter.

Glenn Goucher, president and chief clearing officer for the Canadian Depository for Securities Limited, said in a statement:

“With this initiative, we pursue an innovative partnership approach that will allow us to jointly embark on distributed ledger technology with a use-case that is highly relevant to the wider industry”

The initiative is the latest blockchain-related project for Deutsche Börse, which began testing the technology in early 2015. In late November of last year, the firm revealed that it was working with Germany’s central bank on a securities trade prototype.

Additionally, other CSDs, including those from Russia and China, have moved in the past year to test applications of the tech, in both individual and collaborative settings.

Image via Shutterstock

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