HSBC (HBCYF) this Monday (14th Jan 2019) claimed of settling Forex trades of worth $250 billion using blockchain technology in the last year. The company suggested that the heavily hyped technology is gaining momentum in a sector which was earlier doubtful of being accepted.
The bank in a statement revealed that until now, the bank has made over 150,000 payments and settled over three million Forex trades by making use of blockchain technology. The payments settled with the help of blockchain technology constitute only a small proportion. HSBC also updated that the bank will not reveal any data on the Forex trades that was settled using traditional processes.
The data still marks a significant milestone for the use of blockchain technology by mainstream finance, which until now doubted to start using the technology at any scale.
Blockchain technology has been widely accepted by many nations as it can process and settle transactions in minutes. The technology is highly secured as well since its entries cannot be changed and it does not require third-parties checks.
Until now, many financial institutions and banks have invested hundreds of millions of dollars in the technology, assuming that the technology will cut some costs and simplify the processes of having settlements and making the payments thereafter.
Despite the positive intend from financial and banking institutions towards blockchain, there are only a few banks which have moved from testing to implementation stage for applying blockchain technology in large-scale projects.
The reason why many of the banks are still not confident about applying blockchain technology is that they are worried about high costs of applying the technology, the risk of disruption to existing systems and with uncertainty over regulation.
HSBC mentioned that its blockchain technology has reduced its reliance on external technology as it has automated manual processes.
The risks of delays and errors, cut costs have also been lowered after the intro of blockchain technology within the institution. All, this has helped the bank to optimize its balance sheet in a correct manner.
Richard Bibbey, the bank’s acting head of Forex and commodities was seen commenting on the settlement that the bank was looking at how the technology could help multinational clients better manage Forex flows.