Deutsche Borse Enters Blockchain Race With Dedicated Cryptocurrency Unit
The race for crypto dominance is heating up in Germany after the country’s largest stock-exchange operator announced the creation of a new blockchain unit. The announcement came one month after Borse Stuttgart, Germany’s second-largest exchange operator, launched a new cryptocurrency trading platform.
Deutsche Borse Launches Blockchain Unit
The Frankfurt-based Deutsche Borse AG has created a centrally-steered unit dedicated to ‘DLT, Crypto Assets and New Market Structures,’ according to a press release that circulated Monday. The 24-person team, led by Jens Hachmeister, will further advance Deutsche Borse’s work in the blockchain arena.
“Deutsche Borse has been active with the technology in a first phase of ideation and exploration,” Hachmeister said in a statement. “We invested in various initiatives to create a sound understanding of the trends, the technology and its potential within the traditional segments of our value chain.
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,” he added.
Last month, Deutsche Borse acquired a minority stake in HQLAx, a liquidity and collateral management firm that is developing a new platform for blockchain-based securities lending.
Mainstream Adoption Grows
2018 is shaping up to be a banner year for cryptocurrency adoption, with banks, stock exchange operators and fin-tech platforms increasing their exposure to digital assets. Institutional uptake in the derivatives market is also heating up, with volumes on CME and CBOE futures contracts increasing sharply during the summer months – a historically quiet time for Wall Street.
Just last month, Borse Stuttgart announced it is creating “end-to-end infrastructure for digital assets,” including a trading platform for cryptocurrencies and initial coin offerings. These assets will be made available through the BISON trading app that will be released later this year.
Across the Atlantic, the Atlanta-based Intercontinental Exchange (ICE) has announced a massive crypto venture aimed at transforming the digital currency lanscape. Bakkt, an open platform for cryptocurrency holdings, is developing a “scalable on-ramp for institutional, merchant and consumer participation in digital assets.” The firm is backed by major investors and some of Corporate America’s biggest companies.
The debate over securitization has taken the spotlight away from these efforts, with investors increasingly fixated on the SEC’s approval of the first bitcoin exchange-traded fund (ETF). The securities regulator has rejected at least ten applications this summer, including a revised proposal by Cameron and Tyler Winklevoss. Multiple proposals are still under consideration, including the VanEck SolidX Bitcoin Trust.
With retail interest subsiding, institutional adoption is being positioned as the next major breakthrough for cryptocurrencies. However, as Hacked reported Monday, institutional trading could have unintended consequences for peer-to-peer money
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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