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Eurex Clearing, the clearing house of Deutsche Börse Group, is to bring native digital instruments into its existing clearing framework. It says this will make it the world’s first hybrid central counterparty (CCP).
Under the hybrid model, traditional and digital business will sit under one clearing framework, one rulebook and one unified risk model. Market participants will be able to access digital instruments through their existing clearing relationship and infrastructure, without needing bespoke connectivity, separate risk models or new legal agreements.
ESM Digital Issuances Come To GC Pooling
Native digital instruments, including issuances by the European Stability Mechanism (ESM), the euro area’s financial assistance fund, will become tradable in the GC Pooling segment of repo trading platform Eurex Repo. They will be cleared by Eurex Clearing and accepted as eligible margin collateral.
The instruments will also become eligible collateral in the European Central Bank (ECB) GC Pooling basket. Eurex Clearing says this gives them access to its existing secondary market on the same terms as their traditional equivalents.
“The future of financial markets is hybrid. Instead of creating isolated digital islands that fragment liquidity and trap capital, Eurex Clearing is building a bridge between both ecosystems. Our clients can seamlessly trade, clear, and finance native digital assets through the clearing relationship they already have – backed by one set of rules, one risk model, and one deep liquidity pool.” - Laura Bayley, Chief Executive Officer, Eurex Clearing
One Liquidity Pool For Traditional And Digital Instruments
Eurex Clearing says the model is designed to keep traditional and digital instruments in the same liquidity pool rather than splitting them into separate markets. As a regulated CCP, it novates and clears all transactions, providing settlement finality, multilateral netting and default management. The firm says this gives institutional participants legal and regulatory certainty as they scale up digital market activity.
Link With Clearstream
The initiative connects directly with central securities depository Clearstream, also part of Deutsche Börse Group, which is extending its services to cover both traditional and digital assets through Clearstream Digital Infrastructure.
Clearstream allows clients to move securities and cash between traditional and blockchain systems, including wholesale central bank money via the Eurosystem’s Pontes solution. This was used in the ESM’s recent first live digital native bond issuance.
Together, Clearstream and Eurex are building a digital post-trade lifecycle covering primary issuance, cleared repo trading, wholesale settlement, custody and collateral re-use.
LIQUIDITYFINDER has previously covered Eurex Clearing’s blockchain-based collateral work, including its plans for a digital collateral system and its collateral management service built with HQLAX and Clearstream.
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