HSBC Bank plc are one or the largest banks and financial service providers in the world. HSBC are renowned, with bases across a network of banks and branches in 80 countries. It’s no surprise then, that given their notoriety, HSBC have been exploring the realm of blockchain technology, according to some reports, this has been met with a great level of success.
With such a huge bank tapping into blockchain technology, it’s nice to speculate what might come as a result of a full HSBC adoption of the blockchain. Given their huge customer base and international reach, if HSBC’s institutional and retail customers learn that HSBC are using blockchain technology, perhaps they will go on to explore it too.
This branch of their blockchain exploration focuses on using a blockchain based platform to reduce the cost of foreign exchange (FOREX) trades. The system is known as FX Everywhere and handles a huge amount of trades per day, with an estimated value of around $350 billion. By using blockchain technology, the FX Everywhere platform is able to handle a huge amount of transactions and is able to confirm/authenticate them, giving HSBC the chance to automate the process and also save a lot of money in the process. Transaction fees are down, and so is the level of human interaction needed.
According to reports, FX Everywhere isn’t yet fully blockchain based, so a number of transactions are still made within a more traditional analogue system, though with this in mind, thanks to the blockchain section of the platform, HSBC have confirmed that they have reduced the costs of settling foreign exchange transactions by 25%, a very significant saving all things considered.
According to RTTNews:
“In mid January, HSBC had reported that it settled $250 billion worth of forex trades using blockchain since February last year. HSBC settled over 3 million forex trades and made over 150,000 payments using the distributed ledger technology.”
Overall this is a very exciting development. Now HSBC have proven that the blockchain can help improve their FX Everywhere service, we should expect to see a blockchain overhaul take place, allowing more advanced blockchain technologies to be integrated within many of HSBC’s operations. This eventually could lead to partnerships with major cash settlement blockchain firms, such as Ripple or even Stellar.