Eurex Clearings has given a go-ahead to the Deutshe Borses’s collateralized Coin Project. The plan deals with using tokenized digital coins as collateral among banks.
CollCo, as the collateralized coin is named is the basis of the concept. All peer-to-peer payments that are based on tokenized commercial bank money need collateral. In this case movement of collateral between respective Eurex Clearing members is provided by CPP.
As per the study that examined risk management, process implementation and legal question, conducted by Borse on the prototype built by them, ‘the project should be carried forward’
Stefan Teis, SVP, Group and Business & Development, Deutche Borse, stated, “We completed the first phase at the end of 2016 and are now in the second phase, with the prototype put to a performance test. This serves to verify whether blockchain technology is mature enough to process the standard market volumes, which are high. We expect the first results in the second quarter of 2018.”
The prototype has already been made available online for potential clients and partners for simulations. The German exchange has also begun to look at the openings in terms of cryptocurrency and business applications for crypto assets.
“The cryptocurrency sector is very interesting to us,” confessed Teis. “Imagine cryptocurrency services along an entire value chain: ICO support on the primary market, secondary trading, indices and data offerings for cryptocurrencies, custody services for digital financial instruments or crypto assets. However, these ideas need to be closely analysed in light of the fact that regulation on this area is still lacking and entirely unclear, also considering the major uncertainties in the crypto market.