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HSBC Plans to Track $20 Billion Worth of Assets on a Blockchain by Next Year

By Mark Lemon – Cryptocurrency Dealer

On Wednesday, Reuters reported that HSBC bank is working to track $20 billion worth of assets on a blockchain-based custody platform, Digital Vault, sometime early next year. The system is much like the Distributed Ledger Technology (DLT) that records transactions when users buy and sell Bitcoin.

The report states the bank will move its paper-based records onto the platform by March 2020, wherein investors in real-time can keep track of their securities. This offers a great deal of convenience to investors who can check in on their holdings whenever and wherever it suits them. The concept derives from many blockchains which you can use to buy crypto and transact as all the data is publicly verifiable and available, but this is just with securities instead.

As of now, the records are in their paper-based form which is both tricky as well as time-consuming to access. The report also states that the UK-based bank is only transferring 40% of its records on a blockchain. Presently, the bank has over $50 billion in assets. This is still a huge amount of financial asset data. The bank has not elaborated if they plan to introduce a token so any user could buy cryptocurrency on the blockchain or if it will just be used for private placement records so investors can check holdings.

Reuter said that although the Blockchain platform can help the bank and its clients save on costs, HSBC could not specify the amount that could be saved.

Windsor Holden, an independent consultant told Reuters that no one should expect any savings announcements to be made in the latter half of 2021 after the platform has rolled out. It is unsure how efficient the platform will be for its purpose and if it will have the same effect as buying Bitcoin for transacting compared to traditional international transfers.  

For more than a year now, HSBC has been experimenting with a variety of blockchain tools. Earlier this year in January, the UK-based bank announced over 3 million foreign-exchange transactions had been settled through a blockchain platform, in which over $250 billion in trades were conducted. The platform used was not disclosed, but HSBC could have been buying crypto like those available on the open markets to make the transactions.

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