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Wells Fargo and HSBC announce use of blockchain to settle forex trades

It is the latest sign of how the technology underpinning crypto assets is spreading to

It is the latest sign of how the technology underpinning crypto assets is spreading to more mainstream activities as HSBC and Wells Fargo use a blockchain platform to settle bilateral foreign exchange (FX) trades. As part of the Core-FX platform, Baton Systems said on Monday that both banks are using real currencies and real accounts to settle FX trades in less than three minutes.

To process transactions denominated in U.S. dollars, Canadian dollars, pound sterling, and euro, the two banking giants agreed on a shared settlement ledger. Other currencies will be added in the future. Several Wall Street banks, such as Goldman Sachs, are said to be looking into integrating blockchain technology into their regular processes.

“We are extremely excited to be collaborating with HSBC on a project which places both organizations at the forefront of blockchain innovation. We believe this will be the first step of many utilizing transformative technology across our industry in the years ahead. We are pleased to announce that we will use blockchain technology for the first time in the settlement process of cross-border payments” said Mark Jones, co-head of Macro at Wells Fargo Corporate & Investment Bank.

By using blockchain technology, applied under the framework of an agreed rulebook, the shared private ledger enhances settlement speed and efficiency between Wells Fargo and HSBC. Due to the flexibility provided by this technology, banks will have the ability to net bilateral payment obligations and settle on a pre-agreed cadence multiple times per day.

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