Credit Suisse Group AG unit Credit Suisse Securities (Europe) Ltd. and Dutch financial group ING Groep NV swapped securities worth €25 million using financial resource management firm HQLAX's blockchain-based lending application, CorDapp.
The app is based on fintech consortium R3's Corda blockchain platform. The swap was the first live securities transaction on the platform.
The two banks swapped ownership of Dutch and German government securities using HQLAX digital collateral records, or DCRs. The actual securities remained in unique DCR-linked custody accounts held by Credit Suisse Securities (Europe) and ING at Credit Suisse Switzerland Ltd., unlike in a traditional transaction, where the underlying securities would also need to be transferred between accounts.
The HQLAX model is designed to allow the transfer of the DCR-linked accounts, rather than the underlying securities.
The law firm Clifford Chance helped formulate the legal framework for ownership transfer on CorDApp.
