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Goldman Sachs and Morgan Stanley are now using CLSNet from IBM and CLS, a standardized, automated two-way payment clearing service for more than 120 blockchain-enabled currencies.
As reported in July, the CLS and IBM market infrastructure group have teamed up to create a proof of concept using a Distributed Ledger Technology (DLT) platform to deliver services hosted on a shared network.
In the latest development, six additional participants from North America, Europe and Asia, including the Bank of China (Hong Kong), pledged to join the service. More institutions will sign up in the next few months.
The technology, designed for both buyers and sellers, will standardize and increase FX clearing levels for unsettled settlement transactions, which can reduce and increase liquidity in credit markets. exchange.
The company also claims to support adherence to certain principles of the global code of conduct FX.
Alan Marquard, Head of Strategy and Development at CLS, said: "A standardized and automated payment clearing process will improve intraday liquidity, reduce costs, improve operational efficiency and support business growth.
According to CLS, lack of standardization and automation leads to operational inefficiencies and risks for market players, as processes often have manual intervention and are not fully scalable.
In addition, many foreign exchange market participants do not compensate for foreign exchange payments, preferring to opt for a gross settlement, which leads to higher demand for intra-day liquidity and encourages institutions to hold more capital.
"Since we first used the blockchain on the FX market nearly three years ago, IBM has been working with CLS on the development and deployment of CLSNet as the first deployment of CLSNet. blockchain technology after commercialization, in a global public service "adds Marie Wieck, Managing Director, IBM Blockchain.
She adds, "With CLSNet currently in production with two of the largest banks in the world, an important market function is a testament to the current maturity of blockchain technology and the value it can generate in practice.
CLSNet runs on the blockchain structure of the Linux Foundation Hyperledger Fabric.
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