hsbc digital vault

HSBC is exploring the benefits of blockchain in many of its banking operations. After a test with R3 based Voltron, it plans to conduct banking transactions on a blockchain-based ‘Digital Vault.’ The banking platform will digitalize paper-based records of placements onto a real-time record-keeping platform.

HSBC aims to deploy $20 billion worth of private placement securities on the custody platform. Currently, the records are paper-based and lack standardization. Reportedly, HSBC aims to implement the tech across all it’s $50 billion worth issued financial securities.

The private placements on the platform would permanently reduce the need for mediators, which would reduce the expense of these funds. Moreover, the implementation will also increase the cost-effectiveness by increasing the marketability of these assets.

The bank also projects an exponential growth in the global value of private placements to about $7.7 trillion.

As reported earlier on CoinGape, the Canadian Versa bank also employed a similar technique to issue and store financial securities.

The term ‘digital vault’ echoes around the financial world in several places. For eg., Morgan Stanley has a digital vault for sharing financial details based on an encrypted cloud platform.

As the cryptocurrency hype goes on, the banks are not ignoring the rise of the technology as well. The underlying blockchain technology guarantees transparency and greater security for financial contracts. Moreover, blockchain technology is not only faster but also highly cost-effective and reliable.

Earlier, HSBC made use of the Voltron platform to conduct a yuan based interbank transaction. The details on the digital vault have not been disclosed completely. Nonetheless, the bank seems to be paying serious attention to the use of blockchain in its operations.

Do you think that innovation in banking will erase the cryptocurrency hype? Please share your views with us. 

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Source: Coin Gape