HSBC Adopts Blockchain-Powered Custody Platform

Asia Blockchain Review
December 7, 2019

HSBC Securities Services has announced that will introduce a platform on a blockchain called the Digital Vault that will allow investors to monitor stock details in real-time.

Digitizing Asset Management Processes

According to Ledger Insights, HSBC will be shifting about US$20 billion in private placement assets to the new platform by March 2020.

Currently, the international banking institution records information about custodial assets using a paper-based system. The shift to digital is preliminary, as HSBC is the custodian of over US$50 billion of private placement assets, which are only a small part of the US$7.4 trillion worth of assets under management by HSBC.

Earlier in November 2019, HSBC Singapore revealed that it is carrying out a blockchain trial in partnership with Temasek and the Singapore Exchange (SGX) that is testing out the system to service fixed income securities.

Implementations of Blockchain in Finance

Though HSBC is not the largest custodian in the global financial industry, the bank is the world’s biggest firm dealing in trade finance and has introduced several projects to develop use cases for blockchain technology.

One of the most high-profile projects that HSBC has been supporting is the Letter of Credit blockchain. Formerly called Voltron, a consortium gathering leading international banks, from Bangkok Bank, BNP Paribas, CTBC Holding and ING to NatWest, SEB and Standard Chartered, is working on digitizing legacy trade financing management.

Moreover, HSBC has been funding blockchain startups such as the Utility Settlement Coin project, which involved central bank tokenized money. However, HSBC made the decision not to extend its investment when the project evolved into Fnality.


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