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HSBC Settles $250 Billion Worth Of Foreign Exchange Transactions Using Distributed Ledger Technology

By Jamie Green – Cryptocurrency Broker

The specialist US financial institution Continuous Linked Settlement (CLS) has been side tracked by HSBC, as it has started using its own blockchain technology as reported by Finance Magnates. It has settled $250 billion worth of foreign exchange transactions last year using Distributed Ledger Technology (DLT).

The crypto buying and selling markets are still finding its place for trusted Bitcoin, although the blockchain technology has definitely started to have potential particularly in banking payment services. It appears that HSBC now have proof that blockchain can revolutionise the traditional finance sector. Banks have been reliant on CLS services for foreign exchange transactions so this could be a big blow for the company. 

HSBC confirmed that over three million foreign exchange transactions went through DLT which is still a fraction of the company’s business. It has been a positive experiment with HSBC demonstrating beneficial implementation of blockchain technology, particularly in how it settles foreign exchange transactions.

In November 2018, CLS deployed its own DLT platform. It worked alongside Goldman Sachs and Morgan Stanley to go live with an automated bilateral payment netting service, operating on a blockchain technology platform. The CLSNet tool is providing operational efficiency in trade matching and payment netting for non-CLS settled currencies. This would help strengthen the risk management for banks.

The HSBC project is yet to go live and last year it provided a practical application phase to test before adopting more DLT based technologies. The news had caused some confusion for crypto buying when the token with the same acronym, DLT had risen over 120% in a 24-hour period of the news’ release, though Bitcoin investing in this coin has no correlation to HSBC’s efforts with DLT.

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