HQLAX facilitates settlement of intraday DvP repo for Goldman Sachs
04 December 2024 US
Image: Alena/stock.adobe.com
HQLAX has collaborated with Clearstream and Eurex Repo to facilitate intraday delivery-versus-payment (DvP) repo transactions, using distributed ledger technology (DLT) in the European Central Bank (ECB) trials.
The transactions mark the first DvP repo trades to settle in production using HQLAX’s DLT platform.
Participation in the ECB trials demonstrates HQLAX’s ability to interoperate with other DLT platforms to settle DvP across two independent ledgers, the firm says.
The ECB trials are part of the Eurosystem exploratory work on new technologies for wholesale central bank money settlement, with trials denoting production transactions using real securities and cash.
The participants submitted the trades on the Eurex Repo F7 trading system. The trades were submitted same-day, and securities and cash were settled and returned intraday.
Clearstream acted as market DLT operator with its digital securities platform D7 and coordinated the settlement of the transaction between HQLAX, which facilitated the collateral settlement, and the Bundesbank’s Trigger solution for the cash settlement in real-time gross settlement (RTGS).
The transactions took place between Goldman Sachs and Clearstream, acting as principal, between 26-28 November with Goldman Sachs borrowing cash from Clearstream while delivering collateral via the HQLAX platform.
Commenting on the achievement, HQLAX CEO and co-founder Guido Stroemer says: “Through participating in the trials, HQLAX has demonstrated its ability to interoperate with different forms of cash, including legacy cash in RTGS for DvP settlement.
“This is a significant milestone in creating an intraday DvP repo market in Europe, and we are excited to be part of its future development.”
Amar Amlani, head of EMEA Digital Assets at Goldman Sachs, adds: “Intraday markets offer a valuable tool for institutions to optimise their liquidity and collateral more efficiently while also acting as a method to manage risks and create new revenue streams.
“DLT solutions such as HQLAX combined with digital money solutions provide market participants with greater precision and simultaneous settlement which are critical for intraday markets to operate more effectively at scale and free up key resources.”
Jens Hachmeister, head of Issuer Services and New Digital Markets at Clearstream, believes that managing intraday repo transactions on the HQLAX DLT platform has demonstrated clear advantages for the future of digital repo.
Frank Gast, member of the executive board at Eurex Repo, and global head of repo sales at Eurex, comments: “This has been an incredible opportunity for Eurex Repo together with our Deutsche Börse Group colleagues, our clients, and service partners to make a difference in the wholesale central bank money settlement trials.
“We're fully committed to backing the ECB's pioneering work in adopting DLT-based solutions, which are crucial for the future evolution of the repo market.”
The transactions mark the first DvP repo trades to settle in production using HQLAX’s DLT platform.
Participation in the ECB trials demonstrates HQLAX’s ability to interoperate with other DLT platforms to settle DvP across two independent ledgers, the firm says.
The ECB trials are part of the Eurosystem exploratory work on new technologies for wholesale central bank money settlement, with trials denoting production transactions using real securities and cash.
The participants submitted the trades on the Eurex Repo F7 trading system. The trades were submitted same-day, and securities and cash were settled and returned intraday.
Clearstream acted as market DLT operator with its digital securities platform D7 and coordinated the settlement of the transaction between HQLAX, which facilitated the collateral settlement, and the Bundesbank’s Trigger solution for the cash settlement in real-time gross settlement (RTGS).
The transactions took place between Goldman Sachs and Clearstream, acting as principal, between 26-28 November with Goldman Sachs borrowing cash from Clearstream while delivering collateral via the HQLAX platform.
Commenting on the achievement, HQLAX CEO and co-founder Guido Stroemer says: “Through participating in the trials, HQLAX has demonstrated its ability to interoperate with different forms of cash, including legacy cash in RTGS for DvP settlement.
“This is a significant milestone in creating an intraday DvP repo market in Europe, and we are excited to be part of its future development.”
Amar Amlani, head of EMEA Digital Assets at Goldman Sachs, adds: “Intraday markets offer a valuable tool for institutions to optimise their liquidity and collateral more efficiently while also acting as a method to manage risks and create new revenue streams.
“DLT solutions such as HQLAX combined with digital money solutions provide market participants with greater precision and simultaneous settlement which are critical for intraday markets to operate more effectively at scale and free up key resources.”
Jens Hachmeister, head of Issuer Services and New Digital Markets at Clearstream, believes that managing intraday repo transactions on the HQLAX DLT platform has demonstrated clear advantages for the future of digital repo.
Frank Gast, member of the executive board at Eurex Repo, and global head of repo sales at Eurex, comments: “This has been an incredible opportunity for Eurex Repo together with our Deutsche Börse Group colleagues, our clients, and service partners to make a difference in the wholesale central bank money settlement trials.
“We're fully committed to backing the ECB's pioneering work in adopting DLT-based solutions, which are crucial for the future evolution of the repo market.”
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