Global banking giant HSBC announced on Monday that it has settled over $250 billion in forex trades using blockchain tech in 2018.
The bank showed its interest in blockchain technology last year when it made the world’s first trade finance transaction on blockchain in May 2018.
What Do HSBC’s Figures Reveal?
According to the banking behemoth, it settled forex trades worth about $250 billion (194.15 billion pounds) in 2018, starting February.
During this time, the bank settled over three million FX trades and made more than 150,000 payments using the distributed ledger technology.
The bank did not provide any data on the fx trades it settled through traditional processes but suggested that the amount settled with blockchain is a small percentage of its overall forex trade settlement figure.
HSBC’s Head of forex and commodities Richard Bibbey stated that the blockchain technology could help the bank’s multinational clients to manage forex flows better.
Why Is HSBC’s Usage Important?
Though HSBC noted that blockchain is only a small portion of its overall forex trade settlement data, its usage of this new technology is significant for the blockchain industry.
This is because HSBC is a mainstream financial institution, and this sector had seemed to be reluctant in using blockchain until now.
Some banks have been worried about using blockchain because of high costs or regulatory uncertainty.
Another important thing to note about blockchain technology is that its first major use case was Bitcoin, the world’s first and largest digital currency known for its “anti-establishment” origins.
Reuters suggests that several banks have already invested “hundreds of millions of dollars” in the development of this technology.
Some of them have also moved from testing to implementation of this technology.
HSBC claimed in May last year that it had completed the world’s first commercially viable trade finance transaction using blockchain. It issued Cargill, a food and agriculture firm, a letter of credit which guarantees payment. The transaction involved a bulk shipment of agricultural produce between Argentina and Malaysia.
It seems that this was not a one-off transaction for HSBC and that they have been very actively using blockchain technology throughout 2018, and likely will continue in 2019.