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According to a press release quoted by the Financial Times on Monday, HSBC, one of the largest banking institutions in the world by total assets, reported $250 billion in settled transactions in 2018, using the blockchain technology.
The press release revealed that during the last calendar year, HSBC settled over 3 million blockchain-based foreign exchange transactions. Performed through its blockchain platform, “FX Everywhere,” the bank says it has processed 150,000 payments since the platform launched in February 2018. HSBC completed its first blockchain trade finance transaction in May 2018.
At the time, the financial services group used the technology to issue a letter of credit to agriculture firm Cargill. The letter of credit covered the transportation of produce from Argentina to Malaysia. It was issued by Netherlands financier ING.
FX Everywhere Enhances HSBC
FX Everywhere helps with “orchestrating payments across HSBC’s internal balance sheets,” and the reports suggest that it saw heavy adoption over the last year. The company revealed that settlements were made easier with its proprietary blockchain-based platform. Amongst other things, platform ensured payment confirmations didn’t require additional protocols.
HSBC’s Other Blockchain Efforts
HSBC has been exploring various applications of blockchain technology over the past year. In October, it partnered with Standard Chartered, PNB Paribas and others, to finance a blockchain trade finance platform. Dubbed the “eTrade Connect,” HSBC launched the platform with the aim of improving the efficiency of international trade financing. To achieve this, the platform will cut the time required for the approval of trade loan applications from 36 to 4 hours.
Further Pans for DLT (Distributed Ledger Technology)?
Richard Bibbey, HSBC’s Acting Head of Foreign Exchange and Commodities, stated that the bank “currently hosts thousands of FX transactions.” He added that the integration of blockchain technology has made the process particularly smoother.
“Following prosperous implementation inside the bank, we are now exploring how this technology could help multinational clients – who also have multiple treasury centers and cross-border supply chains – better manage foreign exchange flows within their organizations.”
Although the release didn’t cite the bank’s total payment volumes for last year, Bibbey revealed to Reuters that DLT’s $250 billion represented a small portion” of it. Nevertheless, this is a significant feat that highlights the benefits that come with the adoption of blockchain in the traditional banking sector.