HSBC Exec at Money20/20: Blockchain, CBDCs Pose 'Great Challenge' to Interbank Settlement

A senior executive from U.K.-based bank HSBC has said that time-efficient distributed ledger technologies and central bank digital currencies represent a "Great challenge" to existing real-time gross settlement systems, Cointelegraph learned at the Money20/20 conference Oct. 23.

HSBC's Global Innovation Lead for Global Liquidity & Cash Management, Craig Ramsey, made his remarks during a panel during the Money20/20 conference in Las Vegas yesterday, which was devoted to "Digital Opportunities for Cross-Border Inter-Bank Transactions."

"All the incremental changes that SWIFT are doing [were] one of the things that we considered they issued some statistics in May 2018 that using SWIFT GPI technology, 43 percent of those transactions were settled in 30 minutes, 90 percent were in under 24 hours."

Ramsay continued to say that "One of the things" being looked at in bank working groups is whether corporations really need transaction settlement in real time, or whether 30 minutes is sufficient.

"Because if it is, then that suggests we can actually get quite a long way with just using [existing] technologies," he said.

As he developed his argument, Ramsay then made an apparent about-turn, saying that given that "The technology we have across [existing] RTGS systems needs to be replaced," the idea of central bank issued digital currencies and distributed ledger productively "Challenges frame of reference."

"It doesn't need to happen in the next six-nine months and it's too early to say which would win - it's about the transition and dialogue that will create the ecosystem for corporates to allow them to do what they need to do."

At Money20/20 earlier this week, experts disagreed on whether DLT such as blockchain will have benefits for payments systems more broadly.

Ripple's CTO David Schwartz argued from a retail perspective that "Th[ose] companies that can provide those high-speed low-cost payments will get the business, and those that don't will have to adapt or die, just like in any technological revolution."

This summer, HSBC's compatriot, the U.K.'s central Bank of England, revealed plans to rebuild its RTGS system so that it can interface with private business and platforms using DLT..