According to a press release sent by HSBC Bank to the Financial Times and published in today’s newspaper, it settles $250 billion of Forex trades on the blockchain during 2018.
HSBC, an international banking giant, uses a proprietary platform called ‘FX Everywhere’, which it launched last February and has since then handled three million transactions and 150,000 payments on it.
Richard Bibbey, HSBC’s acting global head of currencies is quoted in the FT as saying, “The technology allows HSBC to conduct thousands of foreign exchange transactions within the bank, across multiple balance sheets, in dozens of countries,” and he added, “FX Everywhere uses distributed ledger technology to drastically increase the efficiency of these internal flows.”
Although the press release did not mention HSBC’s overall payment volumes for 2018, Reuters quotes Bibby as saying that the forex trades settled on the blockchain is a “small” proportion. However, it is agreed that the data marks a significant milestone in the use of blockchain by mainstream finance, which has until now been reluctant to start using the technology at any scale.
It also highlights the opportunities for blockchain uptake in the traditional banking sector, even if in the past banking leaders have aired a mixture of sentiments about the usefulness of the blockchain in banking. On June 18, Carlos Torres, CEO of Spanish bank BBVA, declared that blockchain is “not mature” and faces major challenges, and he was not alone in this; the Bank of Canada, the Russian central Bank and the Central Bank of the Netherlands echoed his view.
HSBC has been engaged in other blockchain projects in recent months, including launching a joint trade finance platform in Hong Kong. And at October’s Money20/20 conference in Las Vegas, Craig Ramsey, HSBC’s Global Innovation Lead for Global Liquidity & Cash Management, told the audience that both blockchain and cryptocurrency posed a “real challenge” to interbank settlements.