'Liquidity Alliance' (LA), an international group of central securities depositories (CSDs), announced that four of its members are cooperating with Deutsche Börse to launch a blockchain-based initiative in order to provide fast and efficient mobilization of collateral.
The blockchain-based prototype termed as ‘LA Ledger' will offer a centralized, quicker and efficient allocation of fragmented security positions that cover financial obligations of market participants in various jurisdictions, the release stated. The four member parties of LA include the Canadian Depository for Securities Limited (CDS), Clearstream (Luxembourg), Strate (South Africa) and VPS (Norway), who want to beat the existing hurdles while moving collateral and make the transfer faster and competent.
“We are proud to be part of this exciting LA Ledger initiative which is adding another leading edge solution to our award-winning suite of collateral management services to the benefit of our mutual clients”, commented Philippe Seyll, Co-CEO Clearstream Banking S.A. at Deutsche Börse Group.
The Dodd-Frank Act in the U.S. and EMIR in the EU are two important frameworks in this regulatory that is leading to a growing demand for high-quality collateral, for which the access is limited.
The ‘LA Ledger’ will be preliminary implemented as a prototype that will be based on the Hyperledger Fabric blockchain and the validation by the regulatory authorities as well as market participants will begin in the second quarter of 2017.
“With this initiative, we pursue an innovative partnership approach that will allow us to jointly embark on distributed ledger technology with a use-case that is highly relevant to the wider industry”, Glenn Goucher, President and Chief Clearing Officer at CDS, said.
