“The need for paper reconciliation will be removed because all parties are linked on the platform in addition to updates are instantaneous,” Vivek Ramachandran, head of growth in addition to innovation at HSBC, said in a statement. “The quick turnaround could mean unlocking liquidity for businesses.”
HSBC in addition to ING said that will the exchange was performed in 24 hours, compared to the all 5-to-10 days the item normally takes to complete such exchanges through a paper-based system.
Proponents of blockchain claim the item has the potential to upend various industries. Sectors like trade finance, health care in addition to insurance are thought of as Great targets for the use the technology as they rely on long paper trails.
While there have been proof-of-concept transactions performed using blockchain technology, HSBC’s was the first that will could have commercial applications, a spokesman for the company told CNBC.
Banks have been pouring money into blockchain projects as the item will be thought that will the technology will significantly disrupt the financial services.
While lenders are not fond of the original use case of blockchain — to underpin cryptocurrency transactions — many see practical use for the technology because of its ability to handle massive amounts of data within a transparent, immutable network.
Last month, Santander teamed up with blockchain firm Ripple to create a foreign exchange service that will enables same-day international money transfers.