HSBC has reported a successful trial of their blockchain-based “FX Everywhere” platform which has saved 25 percent of costs associated with forex trade settlements, Reuters reported on February 14, 2019.
Besides the use of blockchain in cryptocurrencies, it can also be used to save money. For example, the World Trade Organization has estimated that the use of blockchain in the industry will add $3 trillion over the next decade.
Now, it has been reported on February 14, 3019, that HSBC has saved up to 25 percent of its costs associated with forex trade settlements thanks to its use of blockchain.
On a given day, HSBC’s processes between 3,500 and 5,000 trades worth $350 Billion. Since the inception of the platform, it has processed a total of $250 Billion worth of trades
“We going at a pace now,” Mark Williamson, chief operating officer of FX cash trading and risk management, said. “We’re able to demonstrate that this is not a one-off proof of concept or just one or two trades.”
Exact figures about the value of trades still being settled using the trading process weren’t given but those that are being settled on the FX Everywhere platform reportedly represent a small fraction of the overall trades that take place. Regardless, this is an example of blockchain being used on a large scale by a giant of the finance industry.
Based on the word of the COO, HSBC is fully aware and impressed by the amount of money that is being saved and these results go beyond a test case, instead, proving themselves over a significant period of time and a large sum of money.
The platform, according to HSBC, is used to coordinate payments across regions such as Americas, Europe, and the Asia Pacific. Now that its initial run has been such as success, Williamson predicts that a larger volume of HSBC’s trades will be settled on the blockchain-based platform.
“The more participants that you have joining the HSBC shared permissioned ledger and the ecosystem, the more efficient we’re going to become in providing services to our clients.”
In terms of banks making use of blockchain to settle payments, HSBC isn’t the first as banks in Kuwait and the UAE have either partnered with blockchain firms for this purpose or incorporated blockchain into their systems.