It was announced by the Banking giant HSBC that the price of settling the foreign exchange trades has reduced by quarter after using the blockchain based technology. Speaking to the Reuter, the chief operating officer of HSBC FX told that the platform had helped them to save about 25% percent of the cost compared to the traditional system.
Using the FX everywhere platform the bank processes about 3500-5000 trades a day and is settling trades worth 350 billion dollars, as told by the executive overseeing the project. Using the same platform, the bank has decided transactions worth 250 billion dollars last month as per the announcement made by the bank. HSBC is one of the major financial institution that is utilizing the blockchain platform.
The blockchain technology has the possibility to save significant transaction cost for the financial service industry if we carefully study the new scale of HSBC. The executive further added that it not only a single transaction that they are demonstrating. The company has settled 3 million cross -broader transaction and 150,000 trades using the digital ledger system. He further added that using the DLT system a noteworthy amount of internal money flow can be settled.
The technology can surely transform the financial and other industries by overcoming the inefficient process. The believers of the technology say that it is a secure database that can be securely processed and can help in transaction settlement.
So far, the financial institutions are playing a safe game as long as adopting Blockchain is concerned. They are still feeling uncertain about the security, regulation and how it will impact the existing financial system.
HSBC a rare example in the financial industry is using the blockchain technology to coordinate with its payment hubs across America, Europe, and the Asia Pacific. They are using a special type of permissioned ledger that allows to modify and update for the multiple parties at the real time.
The bank has been experimenting on the blockchain technology for a while now. Ever since it had joined the blockchain consortium R3 in the year 2015, it has also joined the Singapore government and Bank of America to work on supply chain trail project based on blockchain technology. The bank has also joined the USC project, destined to conduct various transactions using collateral assets.
The bank is willing to help corporate clients facing a problem with cross border forex flow by providing them with their blockchain based tool.