CLS has announced it will pilot its foreign exchange solution, CLSNet, with 12 global banks for PvP or instant settlement. First launched in 2018, so far CLSNet enables the netting of foreign exchange (FX) transactions in 120 lesser used currencies. Although CLSNet is powered by blockchain, the PvP solution does not use distributed ledger technology (DLT). The 18 major currencies are already catered for in the centralized CLS Settlement platform that processes more than $5 trillion in daily trades.
A dozen banks are participating in the CLSNet PvP trial include Bank of America, BNP Paribas, Citigroup, Deutsche Bank, JP Morgan, Natwest, and UBS. Several of the banks are already using the netting solution.
“While establishing an alternative PvP solution to address the expansion of FX settlement risk will take time, we are optimistic that the work currently underway will deliver significant industry-wide benefits,” said Giles Page of Citigroup.
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