FILE PHOTO: HSBC building in the Canary Wharf business district is seen behind a City of London sign outside Billingsgate Market in London, great Britain, August 8, 2018. REUTERS/Hannah McKay
LONDON (Reuters) – HSBC (HSBA.L has paid $250 billion in forex trades with the blockchain in the past year, said on Monday, suggesting the heavily hyped technology is gaining traction in a sector that, until now, reluctant to embrace it.
The bank has more than three million forex trades and made more than 150,000 payments since February with blockchain, said in a statement. HSBC would not give the information on forex trades settled by traditional processes, and said only that which is settled by blockchain represented a “small” part.
Still, the data marks a significant milestone in the use of the blockchain by the mainstream finance, which has until now been reluctant to begin using the technology at any scale.
Blockchain is a shared database able to process and settle transactions in minutes. Originally intended to support the cryptocurrency bitcoin, the technology does not require any third-parties for the checks and the entries can be changed, making it very safe.
Banks and other financial companies have invested in the hundreds of millions of dollars in the technology, in the hope that it will simplify and slash costs in the processes of settlements to payments.
But there are only a few banks moved from test to implementation of the blockchain in large-scale projects. Many are worried about the high costs, uncertainty about regulation and the risk of disruption of existing systems.
HSBC said that the blockchain technology has automated manual processes and reduced the dependence on external technology.
Blockchain has also reduced the risks of errors and delays, costs, and helped the bank to better optimize the balance sheet, it said.
Richard Bibbey, the bank’s acting head of forex and commodities, said in a statement the bank was looking at how the technology could help multinational customers to better manage forex flows.
Reporting by Tom Wilson, Edited by William Maclean