Banks and financial institutions have invested billions of dollars into finding uses for blockchain, a digital ledger that can be instantly and transparently updated. However, few have come up with practical or widely-used applications.
British banking giant HSBC is moving $20 billion worth of assets to blockchain-based custody platform by March 2020. The platform, known as Digital Vault, will give investors real-time access to records of securities bought on private markets. Through the platform, the global investment bank aims to digitise paper-based records of private placements in order to increase standardisation and speed up processes in the growing industry, allowing investors to track securities in real-time.
$7.7 Trillion by 2022
The bank holds $50 billion in assets at present and is HSBC is only transferring 40 percent of its records onto a blockchain, according to a report. The bank expects the global value of private placements to hit $7.7 trillion by 2022, a jump of 60% from five years earlier. Over the same period.
Amid cryptocurrency hypes, the banks are not ignoring the rise of the technology. The underlying blockchain technology guarantees transparency and greater security for financial contracts. Moreover, blockchain technology is faster and highly cost-effective in comparison to paper-based processes.
Earlier, HSBC made use of the Voltron platform to conduct a yuan based interbank transaction.