Foreign exchange settlement service provider CLS announced on Wednesday that it has gone live with its blockchain-based payment netting solution. According to a statement released by the company, investment banking giants Goldman Sachs and Morgan Stanley are using the service.
Called CLSNet, the blockchain solution acts as a bilateral payment netting service for more than 120 currencies. Apart from Goldman Sachs and Morgan Stanley, six companies from North America, Europe, and Asia, including Bank of China (Hong Kong), have committed to joining the service, with more companies onboarding expected to use the service in the next few months.
“We are excited to be launching CLSNet, the first service of its kind to be operated on a DLT platform,” said Alan Marquard, Chief Strategy and Development Officer, CLS. “Further, this offering demonstrates how we are using our unique, trusted position at the center of the FX market to solve industry challenges.”
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CLS DLT – two years in the making
Reports about the new service, which was built with IBM, have surfaced repeatedly over the past couple of years. Last July, statements issued by CLS indicated that the project was nearly complete after almost two years of development.
Banks have been reluctant to adopt the solution, and CLS had to stymie some of their plans as clients struggled to catch up with them technologically. Back in July, when the company was announcing that its blockchain project was nearing completion, it also had to admit that only around 50 percent of the companies that had signed up for it were going to be using it when it went live.
Aside from a lack of technical know-how, there were a number of other concerns keeping firms from adopting the solution. Speaking to FN London earlier this year, Marquard said that high costs, security concerns, and compliance fears were keeping firms from adopting CLS’ solution.