Efficacy of Blockchain and Central-Bank Cryptourrencies Are A “Great Challenge” to Settlement Systems of Today


Efficacy of DLT and CBDCs Are A “Great Challenge” To Real-Time Gross Settlement Systems, Says HSBC’s Craig Ramsey

Distributed ledger technologies (DLT) have been a beneficial way for companies to become more organized and honest with their transaction. DLT, along with central bank digital currencies (CBDCs) seem to be posing a “great challenge” to another technology – real-time gross settlement (RTGS) systems, according to Craig Ramsey.

Ramsey is known for his role as the Global Innovation Lead for Global Liquidity & Cash Management at HSBC, and he was one of the speakers at the Money20/20 conference in Vegas when he made the remarks. This conference was planned to solely deal with “Global Innovation Lead for Global Liquidity & Cash Management.”

Robert Ruark, the moderator of the panel, asked Ramsey about the technologies that HSBC is examining for RGTS, he first said that his company was seeking out incumbent mechanisms. His reference was pointing to a global payments’ solution with SWIFT, which is SWIFT GPI. He expanded, saying,

“All the incremental changes that SWIFT are doing were one of the things that we considered […] they issued some statistics in May 2018 that using SWIFT GPI technology, 43 percent of those transactions were settled in 30 minutes, 90 percent […] were in under 24 hours.”

HSBC is also examining whether there is a real need for transaction settlement in real time, or if they can still maintain the 30-minute lag time. He added,

“All the incremental changes that SWIFT are doing were one of the things that we considered […] they issued some statistics in May 2018 that using SWIFT GPI technology, 43 percent of those transactions were settled in 30 minutes, 90 percent […] were in under 24 hours.”

Even though Ramsey was creating a great argument for his side, he quickly shifted, commenting that “the technology we have across existing RTGS systems needs to be replaced, the concept of digital currencies and DLT challenges banks’ frame of reference.

Earlier in the week at the conference, there was a disagreement among the experts over whether DLT like blockchain will offer broader benefits for payment systems. CTO David Schwartz of Ripple spoke on behalf of the retail side, saying,

“It doesn’t need to happen in the next six-nine months […] and it’s too early to say which would win — it’s about the transition and dialogue that will create the ecosystem […] for corporates to allow them to do what they need to do.”

CEO Ryan Taylor of Dash commented that CBDCs are basically “inevitable.” However, it will be the decision from the public who “will decide what form of money they want to consume and use as part of their lives.”

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