The interest of global banking giants in blockchain technology is well known. From Goldman Sachs to JPMorgan Chase, banks have had a hard time ignoring this innovative technology, which is designed to revolutionize the financial industry. The newest addition to the list of “interested” banks is HSBC. The bank is interested not just in blockchain but also in the cryptocurrency sector and is “cautiously” exploring this space.
Finding Real World Use Cases for Crypto
Josh Bottomley, the Global Head of Digital at HSBC, told Forbes:
“We are cautious looking into this area …There’s a use case when you have a token or currency that’s actually useful for a particular purpose and it serves that need.”
Bottomley is a former Google executive, and he has suggested that the bank isn’t interested in investing in leading cryptocurrencies like Bitcoin and Ethereum right now. He said that if its based on pure speculation, it would be a very different investment. However, the bank’s view may change in the future if cryptocurrencies become a genuine investment asset for the bank.
He highlighted a criterion for investment — i.e., major asset volatility — and noted that a majority of the bank’s customers would not find it appropriate to invest in an asset that swings aggressively up and down.
Previous Trysts With Blockchain
In May this year, HSBC completed the world’s first trade finance transaction on blockchain using a single, shared blockchain network. The UK-based bank issued a letter of credit to Dutch bank ING for Cargill, an agricultural giant. The transaction used the Corda blockchain solution developed by R3. The transaction was related to a shipment of soybeans from Argentina to Malaysia. The paperless finance transaction took only 24 hours to complete, while a traditional transaction would usually take 5 to 10 days.
The trade finance market is currently valued at trillions of dollars, and the advent of blockchains in this sector could help make global trade easier and more reliable by reducing paperwork and allowing all parties involved in the transaction to get transparent information. A commercially viable solution adopted on a wide scale could be the revolution that shipping companies, global banks, and traders have been looking for.
HSBC Cautiously Exploring Crypto Use Cases was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.