HSBC to shift assets worth $20Bn to Digital Vault blockchain platform
Date: 2019-11-28   Author: Saipriya Iyer  Category: #news

HSBC to shift assets worth $20Bn to Digital Vault blockchain platform

HSBC, the renowned British multinational investment bank, is reportedly planning to migrate its assets worth approximately $20 billion to a new blockchain-based custody platform. the company aims to complete the shift by March 2020.

By deploying the assets to a new platform, the company is looking to digitize private placements’ paper records to increase standardization and boost processes in the growing market.

The new blockchain platform, called Digital Vault, would provide investors access to records of the securities they bought on private markets in the real-time. The company aims to further capitalize upon the booming interest flowing towards such investments from profit-seeking investors.

The company stated that records of private placements are generally held only on paper and thus lack standardization. This makes their access time-consuming and tricky. The company looks after total assets worth approximately $50 billion currently.

The demand for both equity and debt private placements has witnessed significant growth in recent years, particularly as investors are seeking higher returns between low-interest rates globally, and technology companies, in particular, avoid the scrutiny of public industries.

The company estimates that the overall value of private placements would reach $7.7 trillion by 2022, depicting a 60% growth from its valuation five years ago. Additionally, the company believes allocations done by asset manager clients would grow to 20% from the earlier 9%.

The bank did not provide any projections for the potential results of implementing the new custody platform. However, reports cite, huge savings are not expected during the initial stages of the project. There are very less chances of seeing savings from improved efficiency in the first 18 months. 

Head of custody at a securities services arm of HSBC, Ciaran Roddy stated that interest in private placements from British and U.S. insurers is growing. Additionally, Asian and Middle Eastern wealth funds are also witnessing a rise in the same.

Roddy further added that with some of the profits that are on offer, the company is witnessing a rise in demand. 

This announcement comes ahead of an anticipated shakeup of the company’s global banking and market sector, since interim CEO Noel Quinn is looking to reduce costs and enhance returns in business.
 

Source credit: https://www.nasdaq.com/articles/hsbc-swaps-paper-records-for-blockchain-to-track-%2420-bln-worth-of-assets-2019-11-27



About Author


Saipriya Iyer

Saipriya Iyer

Saipriya Iyer currently works as a content developer for AlgosOnline. A computer engineer by profession, she ventured into the field of writing for the love of playing with words. Having had a previous experience of 3 years under her belt, she has dabbled with website...

Read More

More from Saipriya


Post Recommendents

Nomura Holdings to acquire U.S. M&A firm Greentech in US$92m deal
Author: Pankaj Singh

Nomura Holdings, a financial holding company in Japan, has recently announced that it will buy Greentech Capital Advisors, a mergers and acquisitions advisory company from the U.S. that specializes in renewable energy. This will be the company&rsq...


Perfect Day raises $140 Mn in a Series C funding round led by Temasek
Author: Saipriya Iyer

Perfect Day, a US-based food technology startup that has innovated new processes of creating dairy products by using casein, reportedly announced that it raised $140 million in a Series C funding round. This investment...


Current Health raises $11.5 million in Series A funding round
Author: Pankaj Singh

Current Health, a renowned New York based universal patient management platform, reportedly announced that it has closed a $11.5 million Series A funding round which was co-led by UK based MMC Ventures.