In a statement, HSBC said the bank used blockhain to settled over $250 billion and three million forex trades, making over 150,000 payments in the past twelve months.
The figures, howver, have to be put into proportion. While data was not provided by the bank on the volume forex trades settled by traditional processes, the statement said those settled by blockchain represented a ‘small’ proportion. Market observers see the announcement as a milestone in the use of blockchain by mainstream finance, which has been cautious in using the technology. Banks and other financial firms have invested significantly in the technology in a bid to simplify and cut costs in processes ranging from settlements to payments.
However, large-scale projects have been avoided due to concerns over high costs, uncertainty over regulation and the risk of disruption to existing systems. HSBC said its blockchain technology has automated manual processes and reduced its reliance on external technology. The statement also explained blockchain has also lowered the risks of errors and delays, cut costs, and helped the bank to better optimise its balance sheet. Richard Bibbey, acting head of forex and commodities at HSBC, said the bank was looking at ‘how the technology could help multinational clients better manage forex flows.’