R3, HQLAX and five banks build collateral lending solution on blockchain
DLT: from proof-of-concept to live production
Distributed ledger technology (DLT) consortium R3, together with five of its members and financial resource management specialist HQLAX have built a collateral lending solution for liquidity transfers.
The solution is based on R3’s flagship platform, Corda, and is “an operating model for a digital collateral receipt (DCR) lending marketplace”.
It is currently in the proof-of-concept stage. The next step is to transform it into a live pilot and subsequent production platform, R3 says.
“As part of the flight path from laboratory to production, R3 and HQLAx will engage the regulatory community to showcase the prototype and receive feedback for shaping the production ready platform,” the consortium states.
The banks that are taking part in the project are CIBC, Commerzbank, Credit Suisse, ING and UBS.
The participants say DCR is designed to achieve the following benefits:
- Help market participants redistribute liquidity more effectively and more cost efficiently.
- Enhance regulatory transparency of collateral chains.
- Mitigate systemic risk by enabling orderly default unwinds.
