Wells Fargo and HSBC Expand DLT Solution to Include Offshore Yuan
November 17 2022 - 5:00AM
Business Wire
Bilateral agreement adds additional currency being settled
between the two banks
Wells Fargo & Company (NYSE: WFC) and HSBC Bank plc today
announced that the blockchain-based solution they are using for
bilateral FX settlements is expanding to include the offshore yuan
(CNH). The offshore yuan marks the fifth currency to be settled
between the two banks using a shared settlement ledger that
currently encompasses the U.S. dollar, Canadian dollar, British
pound sterling, and the euro. Since launching the shared DLT
solution in December 2021, HSBC and Wells Fargo have settled over
$200 billion in transactions and plan to add additional currencies
over the coming months.
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the full release here:
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Vince Hindman, global head of Rates and
FX Solutions, Wells Fargo (Photo: Wells Fargo)
“We are pleased to expand the capabilities of the platform to
include CNH, allowing us to reduce risk in the payment settlement
process,” said Vince Hindman, global head of Rates and FX
Solutions, Wells Fargo Corporate & Investment Bank. “The
collaboration shows that we can pursue innovative technologies and
apply them in a way that enhances our existing infrastructure and
ultimately benefits our clients.”
Commenting on the announcement, Mark Williamson, global head of
FX Partnerships & Propositions at HSBC said: “Extending CNH PvP
settlement to Wells Fargo is an important milestone for reducing
Herstatt Risk outside G10 currencies. This development is only our
first step in extending our coverage into Emerging Markets
currencies.”
The shared, private ledger is managed by joint Operations teams
at HSBC and Wells Fargo with full visibility by each of the parties
to the relevant FX settlement, along with shared FX transaction
records. The platform is governed under the framework of an agreed
rulebook that facilitates efficient netting and settlement of FX
transactions between HSBC and Wells Fargo in EUR, GBP, CAD, USD and
now CNH. Participants in the network are only privy to transactions
in which they are a counterparty.
The platform runs on Baton Systems’ proprietary CORE distributed
ledger technology and is governed by the Baton rulebook. The
platform enables participants to efficiently settle bilateral
cross-border obligations across multiple onshore and offshore
currencies, coupled with the added flexibility of extended
settlement windows to optimize PvP risk reduction
opportunities.
Notes to Editor:
The FX and payments markets continue to prioritize reducing
settlement risk, utilizing PvP risk reduction tools, on-us
settlement, and payment netting mechanisms. Recent global industry
body statements on these topics include the FX Global Code’s
settlement risk principles 35 and 50, the Financial Stability
Board’s G20 roadmap for enhancing cross-border payments, and the
Committee on Payments and Market Infrastructures Stage 2 report to
the G20.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial
services company that has approximately $1.9 trillion in assets,
proudly serves one in three U.S. households and more than 10% of
small businesses in the U.S., and is a leading middle market
banking provider in the U.S. We provide a diversified set of
banking, investment, and mortgage products and services, as well as
consumer and commercial finance, through our four reportable
operating segments: Consumer Banking and Lending, Commercial
Banking, Corporate and Investment Banking, and Wealth &
Investment Management. Wells Fargo ranked No. 41 on Fortune’s 2022
rankings of America’s largest corporations. In the communities we
serve, the company focuses its social impact on building a
sustainable, inclusive future for all by supporting housing
affordability, small business growth, financial health, and a
low-carbon economy.
News, insights, and perspectives from Wells Fargo are also
available at Wells Fargo Stories.
Additional information may be found at www.wellsfargo.com |
Twitter: @WellsFargo
About HSBC Holdings plc
HSBC Holdings plc, the parent company of HSBC, is headquartered
in London. HSBC serves customers worldwide from offices in 63
countries and territories in its geographical regions: Europe,
Asia, North America, Latin America, and Middle East and North
Africa. With assets of US$2,985bn at 30 June 2022, HSBC is one of
the world’s largest banking and financial services
organisations.
News Release Category: WF-PS WF-IT
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Wells Fargo Susan Monahan, +44 203 9428751
Susan.Monahan@wellsfargo.com
Allison Chin-Leong, (646) 457-8266
Allison.Chin-Leong@wellsfargo.com
HSBC Paul Smith, +44 207 9914867
paul.a.smith@hsbc.com
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