HSBC Says Its New DLT System for Forex Trades 25% Faster

An executive at HSBC has claimed the global bank’s new distributed ledger system for settling Forex trades is 25% more efficient than previous systems, Reuters reports.

The system, HSBC FX Everywhere, is reportedly handling 3500-5000 foreign currency trades per day, though HSBC would not confirm what percentage that represents in terms of total Forex trades handled by the bank.

Mark Williamson, COO of FX cash trading and risk management at HSBC told Reuters that the system has been processing between 3500 and 5000 trades per day and that the system has handled $350 billion in Forex trades since it was introduced, including $250 billion since last February.

“We going at a pace now,” Williamson told the outlet. “We’re able to demonstrate that this is not a one-off proof of concept or just one or two trades.”

If true, HSBC’s system appears be outperforming runs at DLT taken by other institutions, some of which dropped their efforts entirely.

According to a recent report issued by management consultancy McKinsey & Company called “Blockchain’s Occam’s Problem,” a considerable number of financial firms embarked on exploring DLT options between 2012 to 2015:

“Numerous companies set up innovation labs, hired blockchain gurus, and invested in start-ups and joint ventures.”

By late 2017, however, many had determined that:

“…blockchain technology was either too immature, not ready for enterprise level application, or was unnecessary. Many POCs added little benefit, for example beyond cloud solutions, and in some cases led to more questions than answers. There were also doubts about commercial viability, with little sign of material cost savings or incremental revenues.”

To those firms, the blockchains/DLTs they were looking at did not prove to be the simplest available payments tracking/management solution.

HSBC seems to be interested in onboarding more partners onto its DLT for Forex.

Williamson told Reuters:

“The more participants that you have joining the HSBC shared permissioned ledger and the ecosystem, the more efficient we’re going to become in providing services to our clients.”

 

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