HSBC Settles $250bn Of FX Transactions Using DLT
HSBC has settled more than three million FX transactions and made more than 150,000 payments worth $250 billion using distributed ledger technology (DLT). This solution, called HSBC FX Everywhere, has been used for the past year to orchestrate payments across HSBC’s internal balance sheets, creating significant efficiencies and opportunities.
Using a shared permissioned ledger, which provides singularity, transparency and immutability, it transforms the process around intra-company foreign exchange activity, automating several manual procedures and reducing reliance on external settlement networks.
Key benefits include:
- Singularity, transparency and immutability. A shared, single version of the truth of intra-company trades, from execution through to settlement, which reduces risk of discrepancy and delay
- Payments orchestration. Confirmation and settlement is automated by matching and netting transactions, which reduces costs and reliance on external settlement networks
- Balance sheet optimisation. A consolidated, global view of forward cash flows, and certainty of funds throughout the funding cycle, supports greater balance sheet optimisation
Richard Bibbey, Interim Global Head of FX & Commodities at HSBC, said:
“The global, cross-border nature of HSBC and its clients sees us conducting thousands of foreign exchange transactions within the bank, across multiple balance sheets, in dozens of countries. HSBC FX Everywhere uses distributed ledger technology to drastically increase the efficiency of these internal flows.
“Following successful implementation inside the bank, we are now exploring how this technology could help multinational clients – who also have multiple treasury centres and cross-border supply chains – better manage foreign exchange flows within their organisations.”
The banks made 135.8m errors in transaction reporting over nine and a half years.
Brexit will make UK companies less attractive acquisition targets.
There is no certainty that any transaction will materialise.
The bank is SIX's first new member in 2019.
Meritsoft notes an EU-wide FTT lurks in the weeds.