German financial services company Deutsche Boerse Group buys FundsDLT, a blockchain-based fund distribution platform.
Deutsche Boerse, the German stock exchange giant, is making significant strides in its digital transformation journey. The company has recently announced investments in various digital asset firms and platforms, as well as the establishment of a Global Capability Centre (GCC) in Hyderabad, India, to bolster its technological capabilities.
One of the most notable investments is the acquisition of a majority stake in digital asset firm Crypto Finance, with an investment of more than $100 million. The transaction, expected to close in late 2023 or early 2024, is subject to regulatory approvals.
In addition, Deutsche Boerse has also invested in AirCarbon Exchange (ACX), a platform for trading blockchain-based carbon credits. The company has been involved in HQLAχ, a DLT-based solution for collateral mobility, and Clearstream's digital post-trade platform D7, which supports a digital central securities registry.
The GCC in Hyderabad is a strategic move to tap into India's technology talent, bolstering digital transformation efforts in areas such as AI, cybersecurity, cloud infrastructure, and financial markets infrastructure. This customer-centric, innovation-driven approach signals a shift away from cost-focused offshoring.
Deutsche Boerse has also partnered with ANSR for the establishment and scaling of the GCC, reflecting a broader strategy of leveraging specialized global technology centers to advance innovation capabilities.
FundsDLT, a distribution platform that enables permissioned data sharing between asset managers, distributors, and client investors, and supports real-time cash reconciliation, was initially founded by Fundsquare, a subsidiary of the Luxembourg Stock Exchange. FundsDLT secured Series A funding at the start of the pandemic from Deutsche Boerse subsidiary Clearstream, Credit Suisse Asset Management, and Natixis Asset Manager.
Deutsche Boerse's expanding blockchain reach includes various initiatives beyond traditional securities. For example, the company created 360x, a joint venture with Commerzbank, for a secondary market for tokenized real estate, music, and art. UBS Asset Management, along with the two asset managers that participated in the Series A, remain committed as clients.
The shares of FundsDLT will belong to DB1 ventures, a corporate venturing subsidiary of Deutsche Boerse. Clearstream's D7 platform will soon launch a decentralized securities registry, which will be part of Clearstream's fund service offering and integrated with Vestima, its fund processing platform.
While Deutsche Boerse's recent strategy does not explicitly detail investments in FundsDLT, HQLAχ, D7, Crypto Finance, 360x, or ACX, the company's history shows an engagement with digital asset and blockchain initiatives. The current strategic emphasis appears to be on building foundational technology and operational capabilities through the Hyderabad hub.
In summary, Deutsche Boerse Group’s ongoing involvement with blockchain technology manifests through strengthening its technology infrastructure and innovation ecosystem globally, with significant investment in the Hyderabad GCC as a strategic innovation center. However, direct current partnerships or investments in the mentioned blockchain platforms (FundsDLT, HQLAχ, D7, Crypto Finance, 360x, ACX) were not identified in the available information.
[1] Deutsche Boerse Group. (n.d.). Deutsche Boerse Group. Retrieved from https://www.deutsche-boerse.com/
[2] Deutsche Boerse Group. (n.d.). Global Capability Centre Hyderabad. Retrieved from https://www.deutsche-boerse.com/en/careers/locations/hyderabad/
[3] Deutsche Boerse Group. (n.d.). Global Capability Centre Hyderabad - Partnership with ANSR. Retrieved from https://www.deutsche-boerse.com/en/careers/locations/hyderabad/partnership-with-ansr/
[4] ANSR. (n.d.). ANSR. Retrieved from https://www.ansr.co/
[5] Deutsche Boerse Group. (n.d.). Deutsche Boerse Group Announces Global Capability Centre in Hyderabad, India. Retrieved from https://www.deutsche-boerse.com/en/news/deutsche-boerse-group-announces-global-capability-centre-in-hyderabad-india/2342333
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