NYSE-listed Wells Fargo and HSBC announced a collaboration to use a blockchain-based solution today for the settlement of matched foreign exchange (FX) transactions. Both companies have signed an agreement to jointly use a shared settlement ledger for the processing of USD, CAD, GBP and Euro transactions.
Moreover, Wells Fargo and HSBC are planning to expand the platform to settle additional currencies over the next few years. Through the use of blockchain technology, the companies aim to make the FX settlement process transparent and secure. With the new solution, both parties will be able to utilize PvP settlement netting in an efficient manner.
“We are pleased to announce that we will be utilizing blockchain technology for the first time in the settlement process of cross-border payments,” said Mark Jones, Co-Head of Macro, Wells Fargo Corporate & Investment Bank. “We are extremely excited to be collaborating with HSBC on a project which places both organizations at the forefront of blockchain innovation. We believe this will be the first step of many utilizing transformative technology across our industry in the years ahead.”
In its recent quarterly report, HSBC witnessed strong growth in its profits as the overall profit before tax touched $5.4 billion in Q3 of 2021, which is up 74% compared to the same period in 2020.
Blockchain Technology
The adoption of blockchain technology reached new highs in 2021. Leading financial organizations around the world have started using the technology for cross-border transactions due to its transparency.
“As financial services continue to digitize the store of payment and value on the blockchain, we are delighted to work with Wells Fargo in the adoption of this important cross-border digital backbone for the confirmation and settlement of Foreign Exchange trades,” Mark Williamson, the Global Head of FX Partnerships & Propositions at HSBC, commented on the collaboration.
