Deutsche Bourse has filed a patent for a new method of moving collateral between banks using digital coin tokens. The idea is centred upon collateralised coin, CollCo.
Peer-to-peer payments based on tokenised commercial bank money are joined by movements of collateral between the respective Eurex Clearing members, using the central clearing counterparty’s functionality and rules.
It is thought that the new concept could offer the potential for efficiency gains in post-trade processes like settlement and asset servicing.
Eurex Clearing is a central clearing counterparty (CCP) for derivatives transactions executed on the Eurex Platform.
CEO of Eurex Clearing Eric Müller has said that “Our innovative concept can be the basis for a variety of use cases, among them credit risk free cash transfers and the value transfer of assets on the blockchain”.
The Deutsche Börse Group has been very active in the blockchain area, including co-operation with international central securities depositories on the use of distributed ledgers and smart contracts. Additionally, the venture could relate to the development of a working prototype for the blockchain technology-based settlement of securities.
Deutsche Bourse is now looking to their clients, regulators and the central banks to obtain feedback on the newly patented concept.
Exchange chief Carsten Kengeter, CEO of Deutsche Bourse has described the blockchain processes as “a true quantum leap” for the industry, and has expressed strong intentions to utilise this technology in the development of an ‘Exchange 4.0’.
This is another example of a European financial service marching boldly into a blockchain future, which has been a common trend in recent news. In light of the growing interest in this new technology, the European Union Agency for Network and Information Security (Enisa) has extended a warning to financial services firms to place keen focus on the cyber-security risks of the use of Blockchain within the industry.