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IBM, Goldman Sachs and Morgan Stanley Launch World’s First Global Blockchain-Based FX Market Enterprise

November 28, 2018

Bilateral payment netting service CLSNet has officially launched CLSNET, its standardized, automated platform built using digital ledger technology (DLT). Banking giants Goldman Sachs and Morgan Stanley are key participants with six additional financial services, including Bank of China (Hong Kong).

The bank-owned system plans to onboard several more members over the next few months, providing services in over 120 currencies and allowing members to submit FX instructions to CLSNet for spot, tomorrow/next day, forwards, non-deliverable forwards, swaps and same-day trades.

According to the announcement,

“There are many FX market participants that do not net the payments in respect of FX trades, instead choosing to settle on a gross basis. These gross payments have full exposure to settlement risk, resulting in higher intraday liquidity demands and causing institutions to hold more capital.”

The system is integrated with Swift channels to optimize intraday liquidity and improve operational efficiency. It marks a pivotal turn from ideas and prototypes to the kind of real-world DLT integration that’s overhauling financial services and banks, shifting legacy infrastructure toward new fintech and blockchain-based solutions.

CLSNet is built in conjunction with tech giant IBM. It runs on the Linux Foundation’s Hyperledger Fabric blockchain framework and is the first global FX market enterprise blockchain-based application in production.

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