HSBC bank has settled $250 billion worth of forex trades using blockchain technology in 2018, Reuters reports.
Banking sector remains quite hesitant to embrace blockchain technology within the industry, however the recent report suggests opposite – blockchain is starting to gain more traction even among the most persitent cryptocurrency critics.
According to the Reuters, HSBC bank accomodated over three million forex trades and made over 150,000 payments since February using blockchain technology. However, the bank did not reveal exact numbers of the forex trades and noted that only small proportion of those trades were settled on blockchain.
This comes as no surprise given that HSBC bank has openly embraced blockchain technology since 2016. Back in 2018, Joshua Kroeker, Director and Blockchain Lead at HSBC Commercial Banking, noted that several potentially scalable blockchain platforms are becoming available, but to realise the technology’s potential, industry participants will need to agree on networks with common standards and business rules.
HSBC has also pioneered blockchain technology use-cases in Open Account trade using IBM’s Hyperledger underlying technology.
On 3rd July, 2018, HSBC, in conjunction with 3 other banks, completed multiple trade transactions on the we.trade open account platform. We.trade is a joint venture company established by HSBC, Deutsche Bank, KBC, Natixis, Nordea, Rabobank, Santander, Societe Generale and UniCredit. We.trade enabled corporates to complete end-to-end digital trade transactions, through to auto-settlement undertaken by the buyers’ banks on the due date, all on a single platform.
This included creating purchase orders, confirming shipment of goods, raising invoices and confirming agreed settlement conditions have been met. The we.trade platform seamlessly connects buyers, sellers and their respective banks, by providing a single source of information, which is visible in real time and on a need-to-know basis for each participant in each transaction. The objective was to make cross-border and domestic open account trade transactions fully digitised, easier to manage and faster to execute.
The latest statement from the HSBC bank, is just another, yet very significant, step in the use of blockchain technology by mainstream financial institutions.
To date, financial institutions have invested billions of dollars in the blockchain technology, hoping it will improve day-to-day transactions and would greatly cut costs in transaction fees
However, the uncertainty over regulation and the risk of disruption to existing systems, have significantly slowed down the mass adoption of this technology.