June 18, 2024
-

Announcements

Fnality and HQLAᵡ complete successful end-to-end testing of cross-chain intraday repo settlement

Source: XXX

  • Fnality and HQLAX complete the first end-to-end test of a cross-chain repo trade settlement at a precise moment in time, demonstrating interoperability across platforms
  • Plan to launch wholesale cross-chain repo transactions in Q4 2024, subject to UK regulatory approvals

LONDON – 18.06.2024. Fnality and HQLAX have completed the first successful end-to-end (E2E) testing of a cross-chain intraday repo settlement. The trade was submitted in Eurex Repo F7, collateral was earmarked on HQLAX, and cash was earmarked on the Sterling Fnality Payment System TestNet. Upon the trade conditions being fulfilled, both legs were atomically released, completing the settlement at a predetermined precise moment in time. The trade execution was fully automated and programmed via smart contracts and done on a straight-through-processing (STP) basis after it was entered into Eurex Repo F7.

This testing follows on from Fnality and HQLAX completing their first proof of concept (PoC) delivery versus payment (DvP) repo settlement in Q4 2022. Demonstrated together with Banco Santander, Goldman Sachs and UBS, the PoC was the first cross-chain repo swap pilot across R3’s Corda platform and Enterprise Ethereum, setting the foundations for the rapid settlement of intraday transactions. The E2E testing marks the next step in ongoing collaboration between both entities.

The testing showcases a trade-to-settlement cycle of an intraday repo across the Fnality Payment System (FnPS) and the HQLAX Digital Collateral Registry, which bridges the distributed ledger technologies (DLT) of Enterprise Ethereum and R3’s Corda platform.

The protocol used for the test is the Fnality Atomic Settlement Protocol (ASP) which is based on the EEA Interoperability specifications. Fnality has contributed some principles of the Fnality ASP to Hyperledger ‘Harmonia’ which is an open-source project under the Hyperledger foundation. Other contributors include Adhara (Fnality's smart contract development partner), R3 and HQLAX. The aim is to standardise interoperability across enterprise blockchains and DLTs in regulated settings, underlining Fnality's commitment to encouraging the widespread adoption of tokenisation by implementing industry-emerging open and universal interoperability protocols.

The successful E2E testing paves the way for the precise control and easy mobility of liquidity and collateral, ensuring the clearing of wholesale payments in minutes with unprecedented visibility and control. At the same time, it unlocks the ability to settle at a precise moment in time, thus laying the foundation for intraday markets.

Fnality and HQLAX are now preparing to officially launch wholesale cross-chain repo settlements in live environments later this year, subject to regulatory approvals.

Simone Cortese, Director of Product Management, Fnality International said: “Building on our successful demonstration of interoperability between R3 Corda and enterprise Ethereum networks in a DvP transaction in 2022, this milestone signifies a leap forward. It showcases a complete end-to-end process: from a trade originating in Eurex to the transaction settling seamlessly and atomically across FnPS and HQLAX in mere seconds. As we stand on the cusp of our first ‘real’ live transaction, we are poised to unlock groundbreaking opportunities within the intraday finance sector, creating transformative possibilities that will redefine the financial landscape.”

Guido Stroemer, CEO, HQLAX said: “Interoperability across DLT platforms is a core functional requirement for a robust DLT ecosystem for capital markets, which is why we are so pleased with our successful collaboration with Fnality on this transformative DvP use case.”

Frank Gast, MD, Eurex Repo said: “We are thrilled to be part of this groundbreaking initiative with Fnality and HQLAX. The successful end-to-end testing of a cross-chain intraday repo settlement by entering transactions through Eurex Repo’s F7 trading system is a significant milestone in the evolution of the financial industry. We look forward to the official launch later this year.”

Peter Munnings, Co-founder, Adhara said: “It has been an exciting opportunity to bring the first standards-based, regulated DvP interoperability solution into production with Fnality and HQLAX. Additionally, being able to visualise the intraday settlement process on DC Commander Trade View has showcased how powerful this instrument will be for Intraday Liquidity Managers”.

– ENDS –

Media contact

The PHA Group

[email protected]

About Fnality

Fnality is developing a series of regulated, jurisdictional, and DLT-based wholesale payment systems. Each system, known as Fnality Payment System (FnPS), is supervised by its respective central bank.

Within an FnPS, participants utilise bankruptcy remote settlement balances backed 1-to-1 by central bank money for instant wholesale payments. The launch of FnPSs in key jurisdictions will enable real-time cross-currency payments and the secure settlement of any delivery versus payment transactions atomically and around the clock. The credit quality of central bank funds underlying the settlement balances will provide the missing ingredient for novel digital asset markets: a high-quality on-chain cash asset.

In December 2023, the Sterling FnPS, previously recognised by HM Treasury as a systemically important payment system, connected to CHAPS, became the first holder of a BoE Omnibus Account, and commenced controlled live payments. Joining a handful of other regulated payment systems in the UK, it became the World’s first regulated DLT-based wholesale payment system, settling in digital central bank funds, and part of the UK’s recognised payments infrastructure.

For more information, please visit www.fnality.org

About HQLAX

HQLAX is an innovative financial technology firm that leverages DLT to bring game-changing efficiencies to the securities finance and repo industry. Our core clients are banks and asset managers active in the global securities finance and repo markets, and our unique platform enables market participants to execute frictionless, precise and real-time transfer of ownership of securities.

For more information, please visit www.hqla-x.com

About Adhara

Adhara is a leader in developing software solutions for tokenised money over smart contract-enabled, decentralised ledgers. Adhara serves commercial banking groups through Deposit Token solutions, enabling intra-group liquidity and payments optimisation and digital cash services for institutional clients. Via their broader solution set, Adhara also supports FMIs looking to leverage the value of digital cash in payments orchestration, issuance and margining services. Their anchor product, DC Commander, is designed to consistently help clients engage with a variety of new digital settlement layers and business platforms, extracting structural benefits by driving increasing cash optimisation and opening up new revenue-generating strategies.

For more information, visit  www.adhara.io  

Previous article

There is no previous post.

Next article

There is no next post.

New regulatory proposals on counterparty credit exposure point to DLT solutions

New regulatory proposals on counterparty credit exposure point to DLT solutions
Required "current page"

Intraday counterparty credit risk management in capital markets

Intraday counterparty credit risk management in capital markets
Required "current page"

Fnality and HQLAᵡ complete successful end-to-end testing of cross-chain intraday repo settlement

Fnality and HQLAᵡ complete successful end-to-end testing of cross-chain intraday repo settlement
Required "current page"

HQLAᵡ DLT Platform Surpasses €1bn Milestone on DvD Securities Lending Transactions

HQLAᵡ DLT Platform Surpasses €1bn Milestone on DvD Securities Lending Transactions
Required "current page"

HQLAᵡ closes a Series C funding round led by HSBC

HQLAᵡ closes a Series C funding round led by HSBC
Required "current page"

Redefining collateral mobility: a frictionless transfer of securities

Redefining collateral mobility: a frictionless transfer of securities
Required "current page"

Impact of Distributed Ledger Technology in Global Capital Markets

Impact of Distributed Ledger Technology in Global Capital Markets
Required "current page"

Expanding HQLAᵡ’s digital registry value proposition for collateral mobilisation

Expanding HQLAᵡ’s digital registry value proposition for collateral mobilisation
Required "current page"

HQLAᵡ Software Engineer (Luxembourg or Zug Switzerland)

HQLAᵡ Software Engineer (Luxembourg or Zug Switzerland)
Required "current page"

HQLAᵡ Secures Series B Strategic Investment from J.P. Morgan

HQLAᵡ Secures Series B Strategic Investment from J.P. Morgan
Required "current page"

Elisa Poutanen and Guido Stroemer discuss the recent series B funding and the exciting new product development opportunities we are working towards

Elisa Poutanen and Guido Stroemer discuss the recent series B funding and the exciting new product development opportunities we are working towards
Required "current page"

Frictionless trade: collateral just the beginning

Frictionless trade: collateral just the beginning
Required "current page"

Interview with J.P. Morgan’s Executive Director, Paul Pirie

Interview with J.P. Morgan’s Executive Director, Paul Pirie
Required "current page"

Interview with Goldman Sachs’ Head of Digital Assets, Mathew McDermott

Interview with Goldman Sachs’ Head of Digital Assets, Mathew McDermott
Required "current page"

BNY Mellon and Goldman Sachs Settle First HQLAᵡ Agency Securities Lending Transactions

BNY Mellon and Goldman Sachs Settle First HQLAᵡ Agency Securities Lending Transactions
Required "current page"

HQLAᵡ and Wematch announce collaboration for common clients

HQLAᵡ and Wematch announce collaboration for common clients
Required "current page"

HQLAᵡ, J.P. Morgan, Ownera and Wematch Demonstrate a Cross-Ledger Repo

HQLAᵡ, J.P. Morgan, Ownera and Wematch Demonstrate a Cross-Ledger Repo
Required "current page"

Collaboration: Innovate, validate and implement

Collaboration: Innovate, validate and implement
Required "current page"

‍Do you want to be the only client without the internet?

‍Do you want to be the only client without the internet?
Required "current page"

Fnality and HQLAᵡ demonstrate together with Banco Santander, Goldman Sachs and UBS, the first cross-chain repo swap pilot across Corda and Enterprise Ethereum

Fnality and HQLAᵡ demonstrate together with Banco Santander, Goldman Sachs and UBS, the first cross-chain repo swap pilot across Corda and Enterprise Ethereum
Required "current page"

Could HQLAᵡ's solution have helped ease market and operational disruptions during the recent UK Gilt volatility?

Could HQLAᵡ's solution have helped ease market and operational disruptions during the recent UK Gilt volatility?
Required "current page"

Sec Lending and Repo DLT Solutions Set to Take Off in 2023

Sec Lending and Repo DLT Solutions Set to Take Off in 2023
Required "current page"