Forex Trading Platform CLSNet Goes Live With Help from IBM

November 29, 2018 by Ian Edwards

Financial infrastructure group CLS has announced that its distributed ledger technology-based payment netting service for foreign exchange (forex) markets went live on November 28th. Built in conjunction with IBM, CLSNet is already being used by U.S. banks Goldman Sachs and Morgan Stanley.

Also read: Global Blockchain Development Conference Coming to Hong Kong

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Platform Promises Reduction of Costs, Increased Liquidity for Forex Trading

Called CLSNet, the new service will support 120 currencies and be the first of its kind to use distributed ledger technology (DLT) in the forex market. It is designed to allow banks to standardize and automate the calculation of payment netting for forex trades while supporting compliance. CLS claims the service will reduce costs for market participants and increase liquidity.

CLSNet uses the Hyperledger Fabric blockchain framework, a permissioned blockchain system that IBM has used in other enterprise applications. IBM announced in July of this year that it was working with CLS to build a blockchain-based proof of concept for the financial service industry.

Commitments from Eight Participants

CLSNet has users right out of the gate, with two American investment banks, Goldman Sachs and Morgan Stanley, signed up already and six other participants, including the Bank of China (Hong Kong), committed to joining in the future.

CLS already settles forex transactions for more than 60 financial institutions, including giants such as Citigroup and JPMorgan Chase & Co.

The Chief Strategy and Development Officer of CLS, Alan Marquard, said in a statement that CLSNet “will lead to improved intraday liquidity, reduced cost, improved operational efficiencies and ultimately support business growth.”

Marie Wieck, General Manager at IBM Blockchain, added that:

“Since we first pioneered the use of blockchain in the FX market nearly three years ago, IBM has been working hard with CLS on the development and deployment of CLSNet as the first post-trade production deployment of blockchain technology in a global market utility.”

Blockchain for Enterprise

The announcement of CLSNet is the latest large-scale enterprise application of blockchain technology worked on by IBM, which has been a pioneer in the space. The company announced in March that it had 63 companies in its blockchain consortium, including multinational firms such as Visa, HSBC, and Walmart.

In October, the company rolled out a food supply chain platform called Food Trust that is being used by French retail giant Carrefour. And in September, the cryptocurrency network Stellar was chosen by IBM to be the basis for a cross-border payment system called Blockchain World Wire. And earlier in November, a partnership between IBM and the Dubai city government was made public.

Though it worked with IBM to roll out CLSNet, CLS isn’t putting all its eggs in one basket. In May of this year, CLS told Reuters that it had made a $5 million USD investment in R3, a blockchain startup based out of New York.

What do you think of CLSNet and IBM’s other blockchain plans?

Images via Pixabay

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