A little while ago, HSBC reported a successful trial of their blockchain-based “FX Everywhere” platform which has saved 20 percent of costs associated with forex trade settlements. On a given day, HSBC’s processes between 3,500 and 5,000 trades worth $350 Billion. Since the inception of the platform, it has processed a total of $250 Billion worth of trades.
Why does this matter?
This is important because there are a lot of applications that are built on top of blockchain technology, but does not have any real-world results to show. The 20% saved shows that blockchain can make a difference especially when it comes to payments.
“We going at a pace now,” Mark Williamson, chief operating officer of FX cash trading and risk management, said. “We’re able to demonstrate that this is not a one-off proof of concept or just one or two trades.”
Exact figures about the value of trades still being settled using the trading process weren’t given but those that are being settled on the FX Everywhere platform reportedly represent a small fraction of the overall trades that take place. Regardless, this is an example of blockchain being used on a large scale by a giant of the finance industry.
Other use cases for saving money
Besides the use of blockchain in cryptocurrencies, it can also be used to save money. For example, the World Trade Organization has estimated that the use of blockchain in the industry will add $3 trillion over the next decade.
Based on the word of the COO, HSBC is fully aware and impressed by the amount of money that is being saved and these results go beyond a test case, instead, proving themselves over a significant period of time and a large sum of money.
The platform, according to HSBC, is used to coordinate payments across regions such as Americas, Europe, and the Asia Pacific. Now that its initial run has been such as success, Williamson predicts that a larger volume of HSBC’s trades will be settled on the blockchain-based platform.
The more participants that you have joining the HSBC shared permission ledger and the ecosystem, the more efficient we’re going to become in providing services to their clients.
HSBC isn’t the first as banks in Kuwait and the UAE have either partnered with blockchain firms for this purpose or incorporated blockchain into their systems.