Deutsche Börse has filed a patent for a new way of shifting collateral among banks using tokenised digital coins.
The concept is based on a collateralised coin, “CollCo”. All peer-to-peer payments based on tokenised commercial bank money are accompanied by movements of collateral between the respective Eurex Clearing members using the CCP's functionality and rules.
CollCo addresses existing and potential new use cases, says the exchange group, including the handling of margining requirements, credit risk free payments, and delivery-versus-payment asset/value transfer on the blockchain.
As Eurex Clearing interfaces with the Group's central securities depository Clearstream, the new concept might also offer the potential for efficiency gains in post-trade processes like settlement and asset servicing.
“Our innovative concept can be the basis for a variety of use cases, among them credit risk free cash transfers and the value transfer of assets on the blockchain,” explains Eric Müller, CEO of Eurex Clearing. “Through the involvement of our CCP as trusted third party, a clear set of rules and governance would be ensured.”
A functional and technical prototype based on Hyperledger Fabric is currently being developed and a patent application has been filed. Deutsche Börse says it will consult with clients, regulators and central banks to obtain feedback on the concept.
Exchange chief Carsten Kengeter last week described blockchain processes as "a true quantum leap" for the industry, vowing to put the technology front and centre of the group's plans toward the creation of an 'Exchange 4.0'.
Recent activities of Deutsche Börse Group in the blockchain area include co-operation with international central securities depositories on the use of distributed ledgers and smart contracts for mobilising scarce collateral, as well as the joint development of a functional prototype for the blockchain technology-based settlement of securities with Deutsche Bundesbank.foremost.