Banking giant HSBC: XRP Ledger is a potential Game-Changer
In a new report by banking giant HSBC, called the XRP Ledger as a potential Game-Changer that could help, “to exceed the limits of the company and existing market structures”.
The report comes from the series “Game Changers” of the company and analyzes how the Distributed Ledger Technology (DLT) costs and risks in the financial world could reduce. The company analyzes how the Ripple Distributed Ledger technology (DLT) costs and risks may reduce in the financial world. HSBC refers to the Ripple Ledger, which uses the XRP tokens and allows transactions in real-time.
The DLT can streamline the End-to-End transfer of Value and so-out costs, operational risks and settlement periods reduce. So the XRP Ledger of Ripple, for example, provides cross-border settlement in real-time with tokens that represent the currencies of the Central banks.
What relates to the potential impact of DLT as a Whole, is called in the report a long list of potential applications for the new technology. The HSBC Bank determines that Ripple’s DLT is able to optimize the End-to-End prices, in order to reduce costs, operational risks and processing times. The direct impact of the HSBC referred to as “significant”. The company notes that the Ripple technology is helping to create a uniform and efficient System with all the necessary structures.
The ability of DLT to establish a “Single Version of the truth”, it allows you to exceed the limits of the company and existing market structures. One of the most obvious applications for DLT use as an asset register for asset managers or Broker-Dealer. This “Golden source” would eliminate the internal reconciliations, capital efficiency improving, and customers, or supervisors controlled access to real time data.
The HSBC notes in the report, however, that there are still obstacles on the way to a wide acceptance of Distributed Ledger technology. However, the Bank believes that the technology will grow in the coming years. Accordingly, the Ripple will not replace the current capital market platforms over night. This is also due to the perception of technology as something complex. The Situation could however change in a few years.
Of course, DLT will not replace the current capital market platforms over night. Many of the practical barriers to broad acceptance are yet to overcome, there is the considerable and healthy skepticism persists – a natural reaction to the technical complexity of DLT. Nevertheless, we expect that in the next two years, more and more companies from a number of DLT-benefit applications.
Is the DLT in the technology Toolkit of many companies are becoming more and more interesting Option. When the acceptance grows, it will always be DLT and more companies according to their commercial merits, and not according to a theoretical concept to assess. In our opinion, each of the securities companies should actively participate in the DLT, even if you want to – for now – assume no active role in the development.
More and more companies recognize the benefits of Ripple, among other things, this has already been done, also a subsidiary of HSBC. In January 2019, it was announced that the SABB (Saudi British Bank) in December 2018, the Ripple technology. In this respect, HSBC has already a official Connections to Ripple. While SABB is using Ripple, in order to benefit from the technology that has made HSBC a public opinion that the XRP technology tests at least.
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