Eurex Clearing Launches DLT-Based Collateral Solution For Margin

HomeNews* Eurex Clearing now accepts DLT-based collateral for margin requirements.

• The initiative uses the HQLAX platform to enable faster collateral transfers.
• German regulator BaFin approved the solution earlier this year.
• Major financial institutions, including Clearstream, Euroclear, BNY, BNP Paribas, Citi, and JP Morgan, have integrated with the platform.
• Other clearing houses, such as CME, DTCC, and ICE, are exploring similar solutions. Eurex Clearing, a leading derivatives clearing house, now supports distributed ledger technology (DLT)-based collateral for margin requirements in live operations. After receiving approval from German regulator BaFin in January, Eurex launched its digital collateral solution to improve the speed and flexibility of collateral management.

• Advertisement - At the end of last year, Eurex reported holding about $70 billion in initial margin. As of June, the total notional amount outstanding reached $50.6 trillion. The digital approach is powered by the HQLAX platform, which records collateral transactions on a digital ledger.

Traditionally, posting securities as collateral means transferring them from a clearing member’s bank to the clearing house’s custodian. This process can create delays, particularly outside standard business hours. The DLT-based system, by contrast, keeps collateral at its original custodian and records the pledge digitally. This enables instant transfer to Clearstream Banking Luxembourg, a sub-custodian and sister firm of Eurex.

Key industry players have connected to the new platform. These include major European tri-party agents and custodians such as Clearstream, Euroclear, BNY, BNP Paribas, Citi, and JP Morgan. This collaboration allows broad market access to the digital collateral solution.

Although the HQLAX platform does not directly use tokenization, its digital registry has a similar effect to other token-based collateral projects. In addition, other clearing houses—including CME, DTCC, and ICE—are planning or developing similar DLT-based systems.

The move aims to boost the efficiency and mobility of collateral in financial markets, with potential to streamline back-office operations and reduce settlement times.

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