HSBC plans to move USD 20 billion in assets to the blockchain-based custody platform Digital Vault. Moving assets to this platform will allow users to track securities in real-time.
According to Reuters, the banking institution HSBC seems to be intent on moving its current paper records to its new blockchain-based custody platform, Digital Vault, by March 2020, which will help it track securities in real-time.
The bank will specifically digitize its private placement records, which will allow investors to quickly verify their holdings, in addition to increasing standardization and accelerating processes in the growing industry. The HSBC platform will digitize paper records of private locations using blockchain to reduce the time that it takes for investors to write checks or make inquiries regarding their holdings.
According to the news agency, the banking institution expects the global volume of private placements to have a 60 percent increase from 2017 to 7.7 billion dollars by 2022. However, HSBC could not assess the amount that will save the platform for the company or its customers.
HSBC Will Help Track Securities in Real-Time
According to information provided by Reuters, the Digital Vault platform will allow investors to track in real-time all the goods that have been acquired in private markets.
Since private placements are generally conducted physically on paper, their processes are usually associated with a lack of standardization. Meanwhile, access to documents can be a little complicated. Above all, it can take a lot of time.
However, through the application of blockchain technology, the banking and financial company has the confidence to reduce the time that is required to make inquiries about the investments of its investors.
Eighteen Months without Important News
Even though the HSBC banking system has not yet evaluated the potential results of the adoption of the platform, an autonomous blockchain expert hinted that it would be unlikely that significant savings would arise during the early stages of the project.
Windsor Holden, an independent consultant that tracks the blockchain and cryptocurrencies, said that he does not expect to see savings by increasing efficiency announced in the first year to 18 months.
Not the First Approach
Although the integration of a blockchain may seem a step that few people have taken in the financial industry, this is not the first time that the bank has experimented with blockchain tools, since it has done so for more than a year.
In the month of January, HSBC announced that it had liquidated approximately three million currency transactions through the use of its HSBC FX Everywhere blockchain platform, by making about USD 250 billion in transactions during the process. The amount included another USD 150 in payments.
The banking firm stated that the use of a DLT platform has particularly allowed it to verify that payments are settled without the need for external confirmation. In this way, it seeks to unify trading data within the company in a “single and shared version of the truth” and consolidate its vision of cash flows.
By Willmen Blanco