The world’s banking giants may or may not adopt cryptocurrencies at some point, but they are clearly looking to adopt the distributed-ledger technology that undergirds digital money. In the latest such move, Wells Fargo & Co. and HSBC Bank plc early Monday announced they have agreed to process cross-border transactions between the two big banks on a shared blockchain.
To start with, the technology will support transfers in U.S. dollars, the euro, the Canadian dollar, and the British pound sterling, but the banks say they plan to process more national currencies soon.
The blockchain’s efficiencies will help reduce transaction-processing costs for both institutions, they say, and provide both banks with up-to-the minute indicators of settlement status.
The announcement marks the first time either bank has used this technology in the settlement of cross-border payments. “We are extremely excited to be collaborating with HSBC on a project which places both organizations at the forefront of blockchain innovation,” said Mark Jones, co-head of macro at Wells Fargo Corporate & Investment Bank, in a statement. “We believe this will be the first step of many utilizing transformative technology across our industry in the years ahead.”