Blockchain technology will power a new platform launched by HSBC. The step has been taken to reduce operational costs in the bank.
29 November 2019 | AtoZMarkets – Global banking conglomerate HSBC Holdings PLC is doubling down on its use of blockchain solutions. The UK-based bank intends to shift $20 billion worth of assets on a new blockchain-based custody platform by March 2020.
Paper-based records will no longer be an option
Reuters reported that the bank is looking to swap its paper-based records with the Digital Vault platform, which will allow the real-time tracking of securities. By digitizing the private placement of records, the bank will make it easier for its investors to check their holdings.
As the report says, keeping the records on paper up until now makes it tricky to access and takes a lot of time. It seems like HSBC will only transfer 40% of its records onto the blockchain. At the moment, the bank holds $50 billion worth of assets.
Using a blockchain-based platform can save HSBC a lot of money. However, at the moment the bank can’t quantify how much could be saved. Independent consultant Windsor Holden said he expects the savings to be announced late in 2021, as soon as the platform has got a chance to work.
HSBC has been experimenting with the Blockchain
It’s been a year since HSBC is experimenting with blockchain tools. Back in January 2019, it has announced the settlement of 3 million foreign exchange transactions on a blockchain platform, transactions that traded about $250 billion and included 150,000 other payments. More than this, it has given signals that it may be using a blockchain for digitizing letters of credit.
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