HSBC transfers £20bn worth of paper records to a custody blockchain

Distributed ledger technology will be used to digitise investor assets

Blockchain

HSBC has launched a custody blockchain platform to digitise the transaction records of private placements. 

This is one of a number of distributed ledger technology projects HSBC has undertaken over the last couple of years. 

The 'Digital Vault' has been developed by the bank's securities services and enables investors to access records of their private assets instead of having to request a search of paper-based records. The aim is to bring greater functionality to record-keeping.

Advertisement - Article continues below

Private placements, which are stocks, bonds or securities from private investors, are tailor-made transactions with records that have not generally moved from paper to electronic format because of a lack of standardisation, the bank said. It aims to move $20 billion (£15 billion) worth of these assets by March, according to Reuters

The banks said its decision to use blockchain was in response to an increasing number of clients investing in private assets that are looking to pick up the kinds of yields not widely available in the public markets.

By using blockchain to underpin the Digital Vault, HSBC said it gives it the option to move more of the transaction lifecycle on to the ledger in future.

"Our clients want real-time visibility of their private placement transactions so that they know when they will receive the coupon on a private debt transaction or to facilitate an audit of transaction records," said Stephen Bayly, CIO of HSBC securities services.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

"Private assets are prime candidates for digitisation and we see this platform as a key step on the journey as the model evolves. We are preparing for the future, in which the full transaction lifecycle could be stored on a ledger, including issuing digital tokens instead of paper certificates."

This follows on from the banks offer blockchain-based projects, such as the $250 billion Forex trade deals announced earlier in the year and its first blockchain transaction completed in 2018.

Featured Resources

The case for a marketing content hub

Transform your digital marketing to deliver customer expectations

Download now

Fast, flexible and compliant e-signatures for global businesses

Be at the forefront of digital transformation with electronic signatures

Download now

Why CEOS should care about the move to SAP S/4HANA

And how they can accelerate business value

Download now

IT faces new security challenges in the wake of COVID-19

Beat the crisis by learning how to secure your network

Download now
Advertisement

Most Popular

Visit/operating-systems/ios/355935/apple-confirms-serious-bugs-in-ios-135
iOS

Apple confirms serious bugs in iOS 13.5

4 Jun 2020
Visit/mobile/5g/355911/the-uk-pivots-to-japan-for-5g-equipment
5G

The UK looks to Japan and South Korea for 5G equipment

4 Jun 2020
Visit/security/ransomware/355945/new-ransomware-uses-java-to-target-software-organisations
ransomware

Tycoon ransomware discovered using Java image files to target software firms

5 Jun 2020