Wells Fargo and HSBC to Use Blockchain to Settle Forex Transactions

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Wells Fargo and HSBC to Use Blockchain to Settle Forex Transactions For Hannah perez The two huge financial services companies signed an agreement to leverage a joint Blockchain platform to process payments.

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Two Wall Street giants will start to harness technology Blockchain for Forex (FX) transactions, also known as the currency market or foreign exchange market.

The reputed banks Wells fargo Y HSBC announced on Monday an agreement to use a shared blockchain platform for the clearing and settlement of matched foreign exchange market transactions. The product based on distributed technology will allow entities to process transactions in US dollars, Canadian dollars, British pounds and euros.

Wells Fargo and HSBC Leverage Blockchain

According to financial institutions, the product seeks to use the advantages of the technology behind cryptocurrencies, such as transparency in real time. “Using Blockchain technology, this solution provides each bank with continuous real-time transparency of the settlement status for matched FX transactions in the applicable currencies.“, It reads in a official statement.

Mark Jones, Co-Director of Macro, Wells Fargo Corporate & Investment Bank, highlighted in this regard that the agreement “it will be the first step for many using transformative technology across our industry for years to come“. Jones added in the statement:

We are pleased to announce that we will be using Blockchain technology for the first time in the cross-border payment settlement process. We are very excited to collaborate with HSBC on a project that places both organizations at the forefront of innovation.

The settlement system based on Blockchain of banks use proprietary HSBC technology built on CORE distributed ledger technology, inspired by the blockchain of Baton Systemsaccording to the statement.

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Wall Street giants at the forefront crypto

The product will also allow to optimize the opportunities for compensation of settlement of payment against payment (PvP) between Wells fargo Y HSBC; which in turn will allow to reduce the speed and improve the efficiency of the operations. According to the statement, lThe offer is based on the platform FX Everywhere from HSBC, which has settled more than three million interbank transactions worth more than USD $ 2.5 trillion since it began operating in 2018.

The banks added that they have an elaborate plan to incorporate other currencies in the future. They also hope to include a central Financial Market Infrastructure (IMF) provider to manage the platform’s rule book; although that expansion will depend on the results of the agreement. Commenting on the announcement, Mark Williamson, an executive in the Forex division of HSBC, He said:

As financial services continue to digitize the payments and securities store on the Blockchain, we are delighted to be working with Wells Fargo in adopting this important cross-border digital backbone for the confirmation and settlement of currency transactions.

The news comes at a time when large numbers of Wall Street banks are diving into the digital currency space. Earlier this month, a report revealed that at least a dozen major banks in the United States, including Goldman sachs, are exploring the use of Bitcoin as collateral for cash loans.

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Meanwhile, banks like JPMorgan, Wells fargo Y Morgan stanley already offer their wealthiest clients exposure to Bitcoin.


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Article by Hannah Estefanía Pérez / Daily bitcoin

Image from Unsplash

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