The Financial Times reported yesterday that major global bank HSBC processed more than three million FX (forex/foreign exchange) transactions worth $250bn using Blockchain technology in the past year.
And as it says itself, that could suggest a strong use case for Blockchain is emerging beyond cryptocurrency, as the news suggests banks “are finding solid applications for a technology used in cryptocurrencies, which have been under pressure since valuations tumbled last year”.
Admittedly, that $250bn number is huge, but does only represent a very small proportion of all HSBC’s forex trades, says the report, which then goes on to provide more details about the project, ‘FX Everywhere’.
The paper was told that FX Everywhere has been used to co-ordinate payments across HSBC’s internal balance sheets handling over 150,000 payments “netted down from 3m transactions”.
By doing so, Blockchain was able to help automate previously manual processes and reduce the bank’s reliance on external technology providers., with its acting global head of currencies, Richard Bibbey, being quoted as stating that, “[We conduct] thousands of foreign exchange transactions within the bank, across multiple balance sheets, in dozens of countries; FX Everywhere uses distributed ledger technology to drastically increase the efficiency of these internal flows.”
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HSBC managers can also use the system to view trades from execution to settlement, reducing the risks of discrepancy and delay, while use of Blockchain this way has reduced spend on widely-used City forex industry settlement system CLS.
HSBC now plans to make its platform available to clients, particularly companies that manage a number of treasury centres and cross-border payments, the story concludes.