HSBC announced on Monday that its forex trades using blockchain technology was worth over $250 billion last year.
In a nod to the blockchain community, HSBC announced on Monday that it had settled over $250 billion worth of forex trades in 2018 using blockchain technology.
The banking giant has not shared data about the settlements made via the traditional channels but maintained that the blockchain settlements were only a small fraction of the entire number.
Is This the New Era for Blockchain?
Banks have historically averted the technology, but HSBC’s example shows that they are interested in embracing the technology. According to the bank, it made over 150,000 payments on the blockchain and settled over three million forex trades since February 2018.
According to the bank, it is only a small proportion of the total number of transactions settled via traditional methods. It did not suggest how many transactions it settled using those means during the same period.
However small, the data is significant for the blockchain industry as it earmarks the potential of blockchains and its use cases in the banking sector. HSBC didn’t provide details on the cost of these transactions and how much it was able to save using blockchains.
The bank’s acting head of forex and commodities, Richard Bibbey said that it was looking forward to exploring how blockchains could help the forex flows of its multinational clients.
Is Blockchain the Answer to Bank’s Technology Upgrade?
The blockchain is a type of distributed ledger that is immutable and stored as a shared database between several nodes or computers. The ledger can process and settle transactions quickly, and its first major use case was Bitcoin, the largest digital currency in the world.
According to Reuters, some banks and financial firms are investing several million dollars in blockchain technology in an effort to improve their settlements and reduce costs. Some of them have even moved to large-scale projects, but the regulatory uncertainty around this technology is creating problems for the adopters, along with high costs and disruption risks.