In an announcement yesterday, multinational bank HSBC declared a clearing of USD 250 billion of forex trading in 2018 through blockchain. The bank further acknowledged the usefulness of the technology within its banking processes – beyond the speculative utility of cryptocurrencies alone.
The bank said it had processed more than 3 million forex trades using the technology. While this represents a small fraction of its total currency business, it’s a plus for the industry seeing how a large mainstream financial entity could use the tech in simplifying a small fraction of forex trade processes.
The bank developed its own blockchain solution dubbed FX Everywhere which has been used to coordinate over 150,000 payments across HSBC’s internal balance sheets in the course of a year. The bank said that it has helped it “drastically increase the efficiency of these internal workflows” and cut down spending.
HSBC said that the technology has also enabled it to rely less on external technology providers. The distributed nature of the ledger offers real-time updates, therefore, executives within the organizations can view the changes made simultaneously as the transactions move from execution to settlement.
In May last year, the bank said it had performed the world’s first commercially-viable trade finance transaction using blockchain technology when it issued a letter of credit for US food and agriculture firm Cargill.
Now, the bank is making a move to offer the solution to clients handling treasury business and cross-border payments to lend a hand in their processes.
Blockchain has once again proven itself as a useful infrastructure within the financial system. While some may still be hesitant to adopt the technology, others have invested huge amounts of resources to explore relevant use case areas. The results for most may still look stingy, however, a few have been able to attest to the true potential of the technology.
Last year saw strides in the industry that included cross border payment solutions attempted by Kuwait Central Bank. In South Korea, Shinhan Bank has been considering blockchain to mitigate human error in banking.
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