Global banking conglomerate HSBC Holdings PLC is doubling down on its use of blockchain solutions, saying it intends to shift $20 billion worth of assets onto a new blockchain-based custody platform by March.

Reuters reported today that the platform, known as Digital Vault, has been designed to give investors real-time access to records of securities bought on private markets. The records are currently held on paper, making them time-consuming and expensive to access, with multiple intermediaries required to process paperwork and oversee transactions.

Under the initial rollout, HSBC will transfer 40% of its records onto the platform by March. If the process is successful, the bank may likely follow with its remaining assets. HSBC currently holds $50 billion in assets.

Using a blockchain platform to manage assets is aimed at saving time and money, but HSBC said it could not quantify the amount that could be saved for the bank or its clients by the platform at this time.

Windsor Holden, an independent consultant who tracks blockchain and cryptocurrencies, told Reuters that major savings were unlikely in the initial stages of projects such as the custody platform. “I wouldn’t expect to see huge savings or huge efficiencies announced in the first year to 18 months,” Holden said.

Although the likes of Reuters and others remain skeptical about the benefits blockchain platforms can deliver, HSBC is already a significant user. In January, the bank disclosed it had run $250 billion in transactions through its in-house blockchain platform in 2018.

The private blockchain in question was designed to handle foreign exchange transactions. Only 3 million transactions were processed during 2018, but its use was cited as resulting in “significant efficiencies and opportunities.”

A report in February claimed that the blockchain, named “FX Everywhere” was processing 3,500 to 5,000 trades a day, settling trades worth $350 billion and reducing previous settlement costs by a quarter.

HSBC hasn’t stopped there. The bank issued its first letter of renminbi-denominated blockchain-based, letter-of-credit transaction in September. The letter was issued on the blockchain-based Voltron trade finance platform, a platform developed by eight banks, including BNP Paribas, Standard Chartered and HSBC as well. It later followed up by using the same platform to issue letters of credit in Malaysia in October.

The argument that there are no “real-world” success cases or practical uses for blockchain platforms continues to be disproved, with HSBC now leading the way.

Photo: singapor3/Flickr