HSBC Bank Credits Blockchain Distributed Ledger Tech for $250 Billion in Transaction Settlements
While financial institutions have been hesitant to get on board with cryptocurrency, blockchain technology has been seeping into this world.
HSBC is known as one of the largest banks in the world, and they have recently used the distributed ledger technology (DLT) as a way to setting over $250 billion in transactions, which was announced on Monday.
The press release stats that there were 3 million foreign exchange (FX) transactions completed. The HSBC FX Everywhere platform made it possible to complete another 150,000 payments. The platform has primarily been used “to orchestrate payments across HSBC’s internal balance sheets” for the last year.
With this platform, the bank has become more efficient, though they were unclear in the press release whether FX Everywhere was created on an open-source protocol or developed within the company. Still, HSBC noted that a DLT platform made it easier to verify settled payment, ensuring that no other protocols are required for confirmation.
This platform has also been essential in consolidating how it views the flow of cash on a platform that offers a “shared, single version of the truth.”
Richard Bibbey, who is presently acting as the global head of FX and commodities at HSBC, commented that the bank is the host of “thousands of foreign exchange transactions.” As such, the DLT platform makes the process smoother. Elaborating, he said,
“Following successful implementation inside the bank, we are now exploring how this technology could help multinational clients – who also have multiple treasury centers and cross-border supply chains – better manage foreign exchange flows within their organizations.”
The introduction of blockchain technology is not a new concept for HSBC. In February 2018, Joshua Kroeker, who is the senior innovation manager behind HSBC, had commented that the bank was on the cusp of a pilot launch that would organize the transactions on the blockchain.
When the media call was originally made back then, Kroeker said that they were examining the digitization of letters of credit (LoC).