HSBC Reports 25% Savings in Forex Trade Settlement Using Blockchain

London-based banking giant HSBC has revealed its blockchain-powered platform cut costs for foreign exchange (forex) trade settlement by a quarter, Reuters reported on Feb. 14.

According to Mark Williamson — chief operating officer of forex cash trading and risk management at HSBC — the bank processes anywhere between 3,500 and 5,000 trades a day using its proprietary blockchain solution “FX Everywhere.” These trades, worth $350 billion, demonstrate “[w]e’re going at a pace now [...] this is not a one-off proof of concept or just one or two trades.”

Williamson notably did not disclose the overall volume or value of forex trades settled by the bank using legacy processes — noting only that the blockchain-powered settlements represented a small proportion of the total.

In offering significant cost reductions of 25 percent, Reuters notes that the project shows the effective use of blockchain technology at scale by a major player in the global banking industry.

The platform — based on a distributed, but permissioned, ledger — reportedly allows HSBC to coordinate payments in real time across its trading hubs in the Americas, Europe and Asia Pacific.

Williamson told Reuters that HSBC is using the system to settle “billions of dollars” worth of payments each day with effective real-time risk management — again declining to give an exact figure for daily transactions. Nonetheless the COO reportedly forecast that a significant proportion of overall internal flows are likely to be settled on the system, adding:

“The more participants that you have joining the HSBC shared permissioned ledger and the ecosystem, the more efficient we’re going to become in providing services to our clients.”

As previously reported, HSBC’s last update on FX Everywhere was this January, when the bank revealed the platform had by then handled 3 million transactions (150,000 payments) — worth $250 billion — since its launch in Feb. 2018.

Beyond forex, HSBC is also one of a dozen banks to have launched a new blockchain trade finance platform last October, alongside BNP Paribas and Standard Chartered.