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Wells Fargo (WFC), HSBC to Use Blockchain Solution for FX Deals
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Wells Fargo & Company (WFC - Free Report) and HSBC Bank plc have come together to use a blockchain-based solution for the netting and settlement of matched foreign exchange (FX) transactions. This marks Wells Fargo’s debut in utilizing blockchain technology for the settlement process of cross-border payments.
Both companies will share a settlement ledger to process US dollar, Canadian dollar, British pound sterling and Euro transactions. The companies also plan to expand the platform to settle additional currencies in the near term. The companies expect to add more participants and introduce a central Financial Market Infrastructure (FMI) provider for platform rulebook administration.
Leveraging blockchain technology, the solution offers both banks ongoing real-time transparency of settlement status for matched FX transactions in the relevant currencies. By using Payment-vs-Payment (PvP) settlement, netting will be executed efficiently, reducing settlement risks and costs related to the processing of FX transactions.
Wells Fargo management noted, “We are extremely excited to be collaborating with HSBC on a project which places both organizations at the forefront of blockchain innovation. We believe this will be the first step of many utilizing transformative technology across our industry in the years ahead.”
The solution will aid in the seamless settlement of bilateral cross-border obligations across multiple onshore and offshore currencies. Moreover, extended settlement windows to optimize PvP risk reduction opportunities also enhance operations’ flexibility. Also, given Wells Fargo’s strength in U.S dollar liquidity and a robust franchise in the Americas, the partnership with HSBC is a strategic fit. It will complement the latter’s strength in Europe and Asia’s emerging markets.
Some better-ranked stocks in the banking space areSouthern First Bancshares (SFST - Free Report) , Shore Bancshares (SHBI - Free Report) and Colony Bankcorp, Inc. (CBAN - Free Report) . At present, SFST sports a Zacks Rank #1 while SHBI and CBAN carry a Zacks Rank #2 (Buy).
In the year-to-date period, the stock of Shore Bancshares has jumped 36.1%, whereas shares of Southern First and Colony Bankcorp have gained 68.3% and 20.5%, respectively.
Over the past 60 days, the Zacks Consensus Estimate for Shore Bancshares’ current-year earnings has been revised 21.7% upward. The same for Southern First has moved 9.1% north. Current-year earnings estimates for Colony Bankcorp have moved up 15.2% over the past two months.
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Wells Fargo (WFC), HSBC to Use Blockchain Solution for FX Deals
Wells Fargo & Company (WFC - Free Report) and HSBC Bank plc have come together to use a blockchain-based solution for the netting and settlement of matched foreign exchange (FX) transactions. This marks Wells Fargo’s debut in utilizing blockchain technology for the settlement process of cross-border payments.
Both companies will share a settlement ledger to process US dollar, Canadian dollar, British pound sterling and Euro transactions. The companies also plan to expand the platform to settle additional currencies in the near term. The companies expect to add more participants and introduce a central Financial Market Infrastructure (FMI) provider for platform rulebook administration.
Leveraging blockchain technology, the solution offers both banks ongoing real-time transparency of settlement status for matched FX transactions in the relevant currencies. By using Payment-vs-Payment (PvP) settlement, netting will be executed efficiently, reducing settlement risks and costs related to the processing of FX transactions.
Wells Fargo management noted, “We are extremely excited to be collaborating with HSBC on a project which places both organizations at the forefront of blockchain innovation. We believe this will be the first step of many utilizing transformative technology across our industry in the years ahead.”
The solution will aid in the seamless settlement of bilateral cross-border obligations across multiple onshore and offshore currencies. Moreover, extended settlement windows to optimize PvP risk reduction opportunities also enhance operations’ flexibility. Also, given Wells Fargo’s strength in U.S dollar liquidity and a robust franchise in the Americas, the partnership with HSBC is a strategic fit. It will complement the latter’s strength in Europe and Asia’s emerging markets.
Wells Fargo currently carries a Zacks Rank #3 (Hold). The company’s shares have gained 6.8% over the past six months against the industry’s 3.7% decline. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Some better-ranked stocks in the banking space areSouthern First Bancshares (SFST - Free Report) , Shore Bancshares (SHBI - Free Report) and Colony Bankcorp, Inc. (CBAN - Free Report) . At present, SFST sports a Zacks Rank #1 while SHBI and CBAN carry a Zacks Rank #2 (Buy).
In the year-to-date period, the stock of Shore Bancshares has jumped 36.1%, whereas shares of Southern First and Colony Bankcorp have gained 68.3% and 20.5%, respectively.
Over the past 60 days, the Zacks Consensus Estimate for Shore Bancshares’ current-year earnings has been revised 21.7% upward. The same for Southern First has moved 9.1% north. Current-year earnings estimates for Colony Bankcorp have moved up 15.2% over the past two months.