Deutsche Börse Creates a Dedicated Blockchain Unit

News and Analysis

Deutsche Börse, the operator of the Frankfurt Stock Exchange, has formed a new unit to further advance its work into the transformational potential of blockchain technology.

Deutsche Börse, a marketplace organizer for the trading of shares and other securities, has been exploring potential applications of blockchain and implications of cryptocurrencies. In 2016, the Frankfurt Stock Exchange operator partnered with the Deutsche Bundesbank, Germany’s central bank, to develop a blockchain prototype focused on securities trading.

Last month, Deutsche Börse announced that it has acquired a minority stake in liquidity management company HQLAx. The invesment came five months after Deutsche Börse revealed that it was working with HQLAx to develop a securities lending solution using R3’s Corda blockchain platform.

In its recent announcement, Deutsche Börse said that it has now established a 24-person team led by Jens Hachmeister to co-ordinate its blockchain activities across the group. Hachmeister said that the exchange operator has invested in various initiatives to create a sound understanding of the trends, the technology and its potential within the traditional segments of their value chain. However, he said these explorative steps have not been coordinated on a group-wide level.

“In order to use the full potential of the technology for our businesses, to generate efficiencies and create revenues, a centrally steered approach is necessary to make a greater impact,” Hachmeister said.

Hachmeister added that blockchain is a key opportunity for the creation of new market structures. He said blockchain will enable them to add new products onto their present structures and enhance their existing offerings.

“Of course, the expectations are high and not all of them will be fulfilled – blockchain will not be the answer to all our questions,” Hachmeister said. “Yet the digital economy in general is heading for decentralization. In the future, there will be more peer-to-peer governed marketplaces and less intermediaries. In that regard, blockchain has the potential to disrupt the capital markets infrastructure.”

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