HSBC to abandon traditional ledgers and welcome blockchain innovation
HSBC, one of the world’s premier multinational investment banks, is planning to adopt a blockchain-based approach and ditch paper records, according to a report by Reuters. Information tied to assets worth roughly $20 billion will be presented on a new blockchain-based custody platform, a move that HSBC hopes will help investors in tracking personal finances with greater ease.
The initiative, termed as Digital Vault, will help investors access records linked to securities purchased on private markets. This is a crucial move as the banking sector becomes more familiarised with the various applications of blockchain technology.
Digitization is a phenomenon that has recently gripped financial institutions, as well as nations like China, India, and Russia. The requirements for middlemen might be significantly reduced when HSBC unveils the planned manifesto by March 2020. This is a crucial development in light of the growing need for private placements, with investors now on the lookout for better returns and more affordable interest rates.
Reducing time consumption is also one of the reasons why HSBC is looking forward to embracing blockchain. While the bank anticipates a higher level of interest, especially over time, according to crypto-consultant Windsor Holden, “huge savings, or huge efficiencies” may not be observed during the first few years of digitization.
In light of the falling interest in public markets, Ciaran Roddy of HSBC’s security services division believes that “an increase in demand” will surely impact the sector.