Wells Fargo and HSBC to use Blockchain to settle Forex transactions

The two huge financial services companies signed an agreement to leverage money that a trader borrows from a brokerage, enabling them to gain far greater exposure to a position than what their capital allows. a joint Blockchain platform a place to buy, sell and store cryptocurrency to process payments.

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Two Wall Street giants to start leveraging technologyBlockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. for Forex (FX) transactions, also known as foreign exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. or foreign exchange market.

Reputable banks Wells Fargo y HSBC announced on Monday an agreement to use a shared blockchain platform for the clearing and settlement of matched FX market an area or arena, online or offline, in which commercial dealings are conducted. transactions. The distributed technology-based product will allow entities to process transactions in US dollars, Canadian dollars, British pounds sterling and euros.

Wells Fargo and HSBC take advantage of Blockchain

According to the financial institutions, the product seeks to utilize the advantages of the technology behind cryptocurrencies, such as real-time transparency. “Using Blockchain technology, this solution provides each bank with continuous real-time transparency of settlement status for FX transactions matched in applicable currencies.“, reads a official statement .

Mark Jones, co-director of Macro, Wells Fargo Corporate & Investment Bank, destacó al respecto que el acuerdo “will be the first step of many using transformative technology throughout our industry in the coming years. “. Jones added in the statement:

We are pleased to announce that we will be using Blockchain technology for the first time in the cross-border payment settlement process. We are very excited to collaborate with HSBC on a project that puts both organizations at the forefront of innovation

The settlement system based onBlockchain of the banks uses HSBC’s proprietary technology built on CORE distributed ledger a record of financial transactions that cannot be changed, only appended with new transactions. technology, inspired by HSBC’s blockchain.Baton Systemsaccording to the statement.

Gigantes de Wall Street a la vanguardia cripto

The product will also allow for optimized payment versus payment (PvP) settlement clearing opportunities betweenWells Fargo yHSBCThis, in turn, will reduce the speed and improve the efficiency of operations. According to the statement, the he offer is based on the plataforma FX Everywhere de HSBC , which has settled more than three million interbank transactions worth more than USD$2.5 trillion since it went live in 2018.

The banks added that they have a plan in place to incorporate other currencies in the future. They also hope to include a central Financial Market Infrastructure (FMI) provider to manage the platform’s rulebook; although that expansion will depend on the results of the agreement. Commenting on the announcement, Mark Williamson, an executive with HSBC’s Forex division, said:

As financial services continues to digitize the payments and securities store of value on Blockchain, we are excited to work with Wells Fargo on the adoption of this important cross-border digital digital technologies are these electronic tools that have the ability to generate, store or even process data. backbone for FX trade confirmation in cryptocurrency, a confirmation is a measure of how many blocks have actually passed since a transaction was added to a blockchain. and settlement.

The news comes at a time when a number of Wall Street banks are diving into the digital currency currency is a medium of exchange that defines value. space. Earlier in the month, a report revealed that at least one dozen major U.S. banks, including a dozen major U.S. banks, including Goldman Sachsare exploring the use ofBitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. as collateral collateral is any asset that a lender accepts as a form of security to ensure that the borrower repays a loan. for cash cash is the most liquid form of money: physical coins and banknotes in the most narrow sense of the term. loans.