Forex settlement giant CLS plans the introduction of the Blockchain payment service for banks. As of the moment, the company is getting ready for the final testing.
30 July, AtoZ Markets – CLS, the global multi-currency cash settlement system, has reportedly announced that it is now in the final stages of testing its Blockchain payment service for banks.
Forex Settlement Giant CLS to Introduce Blockchain Payment Service for Banks
The service will be launched later this summer, with minimum of seven banks to take part in the initiative in the first months of operations. The CLS has been working with tech company IBM to introduce the Blockchain-powered payment netting service. The system will be incorporated in banking IT systems to enhance the level of standardization in the global Forex markets. In addition, the system is aiming to reduce the costs of the process.
As of the moment, the Forex markets are reportedly having insufficient standardization. Forex institutions are forced to complete the process manually and this often prompts inconsistent approached to netting. Eventually, this leads to higher costs, according to online reports.
CLS is eyeing to offer its members two different options to connect to the CLSNet service. One of them is the direct connection via the SWIFT financial messaging provider, and another is intermediary. Yet, the spokesperson from CLS stated that clients would rely on the SWIFT provider in the first stages. The direct node hosting will be then provided as “the service continues to grow with functionality and client adoption, and the DLT [distributed ledger technology] matures.”
Big Banks are Being Cautious
As around seven banks are ready to test the service, they are reportedly just a part of the bigger number of initial project’s supporters. CLS chief strategy and development officer Alan Marquard as stated that some of their big banking participants are cautious to connect directly to Blockchain. Such sentiment is due to the infancy of the technology and insufficient testing for settlement and safekeeping of securities.
Mr. Marquard has reportedly stated that banking institutions cannot “just install a piece of software.” Firstly, they need to “build operational knowledge and know-how” in order to make sure that their databases feature appropriate privacy protection.
CLS Group has also reportedly invested $5 million in Blockchain consortium in a bid to collaborate with leading Blockchain experts.
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