Worldwide bank HSBC and US banking group Wells Fargo have signed a memorandum of understanding to partner on the development of blockchain-powered solutions for cross-border commercial payments, as part of plans to use distributed ledger technology (DLT) for global FX trading.
The “is forex trading profitable” is a question that many people have. The HSBC and Wells Fargo are working on a solution to make global forex trades easier, faster, and more secure.
HSBC and Wells Fargo, two of the world’s largest banks, are collaborating to use a blockchain technology to improve their foreign currency operations. This will be the first time, according to Mark Jones of Wells Fargo, that a bank would use a blockchain-based technology to initiate and settle foreign exchange (Forex) transactions in its service portfolio.
The two banks will utilize a common settlement ledger to handle international currencies such as the US and Canadian dollars, the British Pound Sterling, and the Euro under this arrangement, with intentions to progressively extend their service scope to include more currencies.
HSBC and Wells Fargo are both planning to use blockchain ledgers.
The two banks will use a platform offered by Baton Systems and will make use of its core distributed ledger, which bills itself as a frictionless blockchain ledger that makes cross-border transactions simple.
“The platform allows parties to rapidly resolve bilateral cross-border commitments across several onshore and offshore currencies, with the additional option of prolonged settlement periods to maximize PvP risk reduction possibilities,” according to the statement. The strength of HSBC in Europe and Asia’s developing markets is complemented by Wells Fargo’s depth of USD liquidity and strong brand in the Americas.”
HSBC’s global head of FX partnerships and propositions, Mark Williamson, added:
“As financial services continue to digitize the storage of payment and value on the blockchain, we’re excited to collaborate with Wells Fargo on the adoption of this critical cross-border digital backbone for the confirmation and settlement of Foreign Exchange deals.” We’re delighted to expand the FX Everywhere network while also ensuring that we’re ready to deal in new types of regulated digital currencies like Central Bank Digital Currencies.”
The new blockchain-based partnership will be built on HSBC’s FX anywhere platform, which has handled over 3 million cross-banking trades in the last three years.
According to the formal statement, the two banks will follow the Baton System rules, which is a regulatory architecture meant to ensure that the deal is legitimate.
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