Securities lending platform HQLAx has closed a €14.4m investment round led by BNY Mellon, Goldman Sachs, BNP Paribas Securities Services and Citigroup, and with participation from longtime strategic partner Deutsche Börse Group.
HQLAx enables market participants to redistribute their collateral by exchanging the ownership of tokenised securities on Corda’s blockchain platform, which no longer requires the underlying securities to move across users.
Each of the new investors will connect to the HQLAx platform later this year as they seek to improve liquidity management and address European collateral fragmentation. BNY Mellon will connect as both Triparty Agent and Agent Lender, Goldman Sachs as Principal, BNP Paribas Securities Services as Triparty Agent, and Citibank as Custodian.
Mathew McDermott, global head of digital assets, Goldman Sachs, says: “HQLAx’s platform will bring meaningful efficiency to the securities lending and collateral management markets. HQLAx’s innovative use of distributed ledger technology is a prime example of the important role transformational technologies can play in reshaping the financial system, and we are pleased to be investing in and partnering with the company.”
ING's blockchain team developed the initial version of the HQLAx application and together with Credit Suisse was the first to execute a live collateral swap with full legal exchange of contracts and settlement back in March 2018. The Dutch bank took a stake in the company in May last year.
Guido Stroemer, chairman and CEO of HQLAx, comments: “Our company has come a long way from starting out as a concept in an R3 Laboratory to partnering with Deutsche Börse and going into production with early adopters Commerzbank, Credit Suisse and UBS. Closing this strategic investment round with BNP Paribas Securities Services, BNY Mellon, Citigroup and Goldman Sachs is another major step towards market adoption.”