HSBC and Wells Fargo use blockchain to settle forex trades

LONDON, Dec 13 (Reuters) – HSBC and Wells Fargo have begun using a blockchain platform to settle bilateral foreign currency (FX) trades in the latest sign of how technology which underpins crypto assets is spreading to more mainstream activities.

Baton Systems, the company behind the Core-FX distributed ledger technology, or DLT, said on Monday the two banks are using the platform to settle FX trades using real currencies and real accounts, in less than three minutes.

It avoids passing the trades through CLS, a third-party bank widely used in the sector for settling FX trades, Baton said, adding that such rapid settlement directly between the two banks cuts exposure and settlement risks.

Last month SIX Swiss Exchange’s new blockchain based digital trading and settlement arm issued and its first bond.

Speedier settlement means tying up costly capital and liquidity for a shorter period to insure against a trade going wrong. read moreReporting by Huw Jones; editing by Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

This article was originally published by Reuters.

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