The Hong Kong and Shanghai Banking Corporation, HSBC, which is the British multinational banking and financial services holding company expressed its need for a faster cross-border payment system.
They revealed settling $250 Billion Foreign Exchange Transactions using distributed ledger technology (DLT) and RippleNet.
This technology called HSBC FX Everywhere has been used by the financial service company in the past few years to route payments across its internal balance sheet.
According to the interim global head of FX and commodities at HSBC, Richard Bibbey, the financial company conducts thousands of foreign exchange transactions across several balance sheets in so many countries.
The HSBC FX Everywhere uses DLT and RippleNet to increase the efficiency of these foreign exchange transactions. The bank can initiate different manual procedures without relying on external settlement networks.
Ripple’s Role in Distributed Ledger Technology
Ripple team has been working to grow the network connecting with banks and other payment providers, globally. Creating awareness and building the knowledge base on DLT enabling payments and foreign exchange subject matter experts (SME) to fully understand how this technology works.
This will equip them to change the present state of the international small value payments and prepare them for the internet of value.
They work to educate Ripple’s clients to grow their network of partners and payment on RippleNet.
Why the Need for Distributed Ledger Technology?
- It can be used to orchestrate different consensus in a database distributed across multiple users.
- It reduces the complexity of reconciliations, manual intervention, and other data processing steps.
- It uses protocol tokens better known as cryptocurrencies to compensate users for the processing that maintains accuracy.
- It allows avoidance of reliance on centralized infrastructure and guards against corruption.
- It combines different technologies like peer-2-peer networking, distributed consensus algorithms, and cryptography.
Ripple XRP has been found as the most suitable token for the distributed ledger technology. Also offers a platform for fast and cheap process of cross-border payments.
Disclaimer: This article is not written for financial purpose. It is written solely for educational and informational purposes. Do not use as a basis for crypto trading. Cryptocurrencies are generally volatile.