The international system of conversion of foreign exchange transactions CLS is now in its final testing stage of its service of interbank payments on the blockchain.
According to the publication Financial News, concern about the leading dealers of the Forex markets, calculation and settlement of payments on which does CLS, forced the new York company to disclose information about the progress of two-year blockchain project.
As it became known, the service will be ready for launch in late summer. It is expected that at least seven banks will begin to operate the system in the first months.
The company noted that the blockchain-service netting of payments, which CLS was developed together with IBM, will be integrated into the Bank’s IT-system in order to improve the level of standardization on the global Forex markets, as well as to reduce costs in the process.
The low level of standardization at the present time is one of the main problems of the Forex markets: institutions have to complete this process manually, which often causes the emergence of different approaches to the calculations and leads to higher costs.
CLS plans to offer banks two options for connecting with service CLSNet: direct connection and connection through a major provider of financial messaging system SWIFT. However, the company explained: clients will work with SWIFT only in the early stages, because “the service continues to grow along with the growth of functionality, the degree of adaptation customers” and “maturing” of the technology of the DLT.
While their willingness to test the service said seven banks, according to some, this is only half of the total number of financial institutions that supported the project initially. Head of the division of CLS at the strategy and development Alan Marquard (Alan Marquard) said that some of the other potential partners of companies engaged in banking seem to connect to the blockchain due to the fact that technology is still not sufficiently tested for settlement and custody of securities.
As explained by Marquard, banks can’t “just set something”: they need “operational knowledge and know-how” to ensure that the databases have sufficient privacy protections.
It is worth noting that among the partners of the CLS Group, initially known as Continuous Linked Settlement, big names such as Goldman Sachs, JPMorgan, Barclays and Citigroup, these companies also entered into the blockchain-a consortium-based company. At the end of may CLS Group itself has invested $5 million in the blockchain-the consortium — the goal of this initiative was the collaboration with leading industry experts blockchain.
It is noteworthy that the Society for worldwide interbank financial communication channels (SWIFT), whose experience in the support of financial institutions is 45 years, in March announced the “fantastic” progress in her DLT-project for interbank transfers.
On the other hand, the use of the blockchain such entities as the SWIFT, relatively complex. So, in June, Ripple chief cryptographer, said that banks will hardly appeal to the blockchain to optimize the scope of processing international payments because of the low scalability and privacy issues.
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