Banking giant HSBC is planning to move $20 billion worth of assets on a Blockchain -based custody platform as early as March next year.
Reported by Reuters, the bank intends to move its current paper-based records on the new platform, known as Digital Vault. It will also allow investors to track securities bought from a private market in real-time.
The use of blockchain technology in storing assets will also reduce inquiry time by investors on their holdings.
The London-headquartered bank currently manages $50 million worth assets, which means it will move 40 percent of its assets on the blockchain-backed platform.
Introduced to the world a decade ago, blockchain has enormous potential to transform the financial sector, making it efficient and cost-effective.
Though it has been anticipated that bringing blockchain-based solutions in the banking system will reduce costs, HSBC could not quantify any amount it could save with the new technology.
The bank anticipates that by 2020, the global value of private placements will hit $7.7 trillion - an uptick of 60 percent in five years - while in the same period allocation by asset managers have been projected to touch 20 percent from the current nine percent.
Blockchain in banking
HSBC is not a new mainstream player in the blockchain arena. Earlier this month, the bank joined hands with the Singapore Exchange (SGX) and investment company Temasek to execute a blockchain pilot for a fixed income issuance, Finance Magnates reported.
Earlier this year, HSBC also completed its first blockchain-based cross-border Letter of Credit (LC) transaction dominated in Chinese yuan.
Reuters also outlined that the advancement using blockchain comes at a time when the bank’s interim chief executive Noel Quinn is pushing for cost cuts to improve the return in the business.
