Using the Finteum DLT platform, UBS and CIBC negotiated a USD-EUR intraday FX swap, which was executed on the TP ICAP UK multilateral trading facility (MTF).
FX Swap transactions usually last days, but in Finteum’s case, they are for hours. The key benefit is the ability to specify a tight settlement window. This should reduce the need for banks to hold such significant amounts of High Quality Liquid Assets (HQLA) buffers to meet intraday demands.
A 2018 Oliver Wyman report estimated that if banks reduce intraday liquidity requirements by a quarter, they could save $25-$75 million per year. Since then interest rates have surged.
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