HSBC Confirms $250 billion in FX Transactions Settled Through Blockchain

HSBC Blockchain FX transactions distributed ledger technology

Global banking group HSBC has confirmed it has successfully settled transactions worth $250 billion on its internal blockchain platform, following trials that could lead to a wider rollout of the technology.

Via the HSBC FX Everywhere platform, the bank said that some three million FX trades and over 150,000 individual payments had been processed through the system, which relies on distributed ledger technology for recording and processing transactions.

The development is being hailed by the bank as a significant breakthrough for its blockchain efforts, with the promise of replacing a number of currently manual processes.

According to a company news release, the bank has been using the system over the past year “to orchestrate payments across HSBC’s internal balance sheets,” resulting in “significant efficiencies and opportunities” compared to prior technologies.

“It transforms the process around intra-company foreign exchange activity, automating several manual procedures and reducing reliance on external settlement networks.”

Specifically, HSBC drew attention to the ability to verify payments without the need for external confirmations, as well as providing a singular version of intra-group trade data – a “shared, single version of the truth” that enables the bank to keep definitive records in real time.

Richard Bibbey, interim global head of FX and commodities at HSBC, said that the technology would ultimately improve the efficiency of the thousands of FX transactions the bank processes every day.

“Following successful 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.”

The news is only the latest instance of HSBC embracing blockchain technology. In February last year, the bank was reported to be on the verge of launching a pilot for handling digital letters of credit, powered by blockchain.

At the time, senior innovation manager Joshua Kroeker said the bank was at a “tipping point” with the technology.

“We’re at the tipping point of getting our customers involved in live transactions in the coming weeks and months. The technology has come a long way, we’re much more comfortable with its security and scalability.”