HSBC and Wells Fargo have extended their FX settlement system that uses DLT to include Chinese Yuan (CNH) bilateral transactions. The two banks started using the solution at the end of last year and have now transacted more than $200 billion between them. So far, transactions have been in USD, EUR, GBP and CAD.
However, HSBC has used the same FX Everywhere solution to process the settlement of trades between HSBC subsidiaries and the platform has now processed $4.3 trillion in 6.3 million trades.
By using DLT, the companies have shared FX transaction records and full visibility into the transactions, reducing the need for reconciliations. The solution enables PvP net settlement in commercial bank money compared to CLS, which operates in central bank money. It is also less restrictive in terms of settlement timing. The ultimate benefit is a reduction in risk.
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