HSBC And Wells Fargo To Employ Blockchain For FX Transactions
American Wells Fargo and British HSBC Bank are partnering up to employ a blockchain-based product to settle matched foreign exchange (Forex) transactions.
The two banks plan to use a shared ledger to process operations with US dollars, Canadian dollars, British pounds, and Euros, additional currencies planned to be added in the near future.
According to press release, applying blockchain technology will provide the two banking giants with transparency of settlement status for matched Forex transactions in the aforementioned currencies, and allow both entities to utilize Payment-vs-Payment (PvP) operations and is expected to reduce the risks and costs of processing foreign exchange settlements.
Mark Jones, Co-Head of Macro at Wells Fargo commented:
“We are pleased to announce that we will be utilizing blockchain technology for the first time in the settlement process of cross-border payments. We are extremely excited to be collaborating with HSBC on a project which places both organizations at the forefront of blockchain innovation. We believe this will be the first step of many utilizing transformative technology across our industry in the years ahead.”
The shared ledger will also enhance settlement speed and efficiency through the use of blockchain technology. Wells Fargo and HSBC will be able to accumulate bilateral payment obligations. The opportunity builds on HSBC’s FX Everywhere platform, which has transacted over three million intrabank trades worth over $2.5 trillion since its launch in 2018.
HSBC has hopes to expand the system by adding more participants and introducing a central Financial Market Infrastructure (FMI) provider to manage the platform’s standards.
Mark Williamson, Global Head of FX Partnerships & Propositions at HSBS commented:
“As financial services continue to digitize the store of payment and value on blockchain, we are delighted to work with Wells Fargo in the adoption of this important cross-border digital backbone for the confirmation and settlement of Foreign Exchange trades.”
