HSBC and Wells Fargo to use Core-FX distributed ledger technology to settle FX trades
HSBC and Wells Fargo have stated that they will start using a blockchain platform which will primarily be sued to bilateral foreign currency (FX) trades. Both the banks are partnering with Baton Systems, the company behind the Core-FX distributed ledger technology and they will use this innovative platform to settle FX trades by using real currencies and real accounts, in just three minutes.
The two banking giants have agreed to share settlement ledger to process U.S. dollar, Canadian dollar, British pound, and euro transactions. Both the banking firms are also aiming to expand the process to other currencies in the future. They will also be integrating blockchain technology into their regular banking processes.
By using the new blockchain technology the banks can avoid passing the trades through CLS, which is a third-party bank that is primarily used in the sector for settling FX trades and such settlements directly between the two banks cuts exposure and settlement risks. It will also benefit the customers by saving their time and cutting unwanted costs.