Deutsche Boerse buys minority stake in HQLAx to advance blockchain efforts

German stock exchange Deutsche Boerse is expanding its partnership with blockchain startup HQLAx.

The companies first entered into a partnership in March of 2018 in order to build an innovative securities lending solution using the R3 Corda blockchain platform.

The effort has made significant progress in the past couple of months Deutsche Boerse said. This includes the commencement of the on-boarding process with an initial set of banks as well as discussions with authorities

According to the official release, Deutsche Boerse has acquired a minority stake in HQLAx for a single-digit euro million amount. The investment will be managed by Deutsche Boerse’s fintech venture fund, DB1 Ventures. While, the specific terms of the deal have not been disclosed, DB said that it is likely to acquire further shareholdings in HQLAx around the end of 2018.

“We are thrilled to announce the investment in HQLAx, thereby bringing this collaboration further forward. This is a strong value added and complementary to other initiatives that we are developing in the blockchain and new technologies space across the entire value chain of our market infrastructure,” Jens Hachmeister, in charge of blockchain initiatives across Deutsche Börse Group, said.

As part of the investment deal, DB will take two seats at HQLAx board, represented by Philippe Seyll, who is in charge of the Group’s Global Securities Financing business, and Jens Hachmeister, responsible for the development of blockchain initiatives across the Group.

“This collaboration will enable us to create a true blockchain-based solution in the post-trade arena. Together with like-minded partners such as HQLAx we want to create a standardised lending marketplace. It will allow market participants to redistribute collateral liquidity more efficiently by improving interoperability for pools of securities residing in multiple, disparate settlement systems and locations,” Seyll said.