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Treasurers could benefit from HSBC’s shared ledger FX system

HSBC announced on Monday that it has used blockchain technology to manage more than three million foreign exchange transactions worth around $250 billion (£194 billion) in the past year, adding that its shared ledger FX settlement system could help MNCs with multiple treasury centres and cross-border supply chains. Writing in the Financial Times, currencies correspondent Eva Szalay noted: “That represents a tiny sliver of [HSBC's] overall currencies business, but still offers a rare example of a blockchain-based product that has proven its worth in wholesale finance.”

The FT explains that HSBC's distributed ledger project, FX Everywhere, has used a shared ledger to co-ordinate payments on HSBC’s internal balance sheets. In the past year, it has handled more than 150,000 payments — the net result of the three million FX transactions. This has helped HSBC to automate previously manual processes and reduce the bank’s reliance on external technology providers.

Richard Bibbey, interim global head of currencies 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.”

HSBC says this has cut the bank's spending bill with CLS, the entity responsible for transaction settlement.

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