CLS Launches Blockchain-Based Platform with Goldman Sachs, Morgan Stanley
UK-based CLS, a company that provides Forex settlement, processing, and data solutions, said that its blockchain-based CLSNet was live.
Forex settlement provider CLS announced on Wednesday that its CLSNet is now live with US banking giants Goldman Sachs and Morgan Stanley. CLSNet is a blockchain-based bilateral payment netting service for more than 120 currencies. Besides Goldman and Morgan Stanley, six more companies from North America, Europe, and Asia will apply the solution, including Bank of China’s Hong Kong branch. In the coming months, the network is expected to expand by adding even more banks and financial institutions.
CLSNet is based on distributed ledger technology (DLT), an umbrella term that comprises blockchain. Its bilateral payment system is standardized and automated, which improves intraday liquidity, thus ensuring efficiency and mitigating the risks. The platform was built by CLS in collaboration with IBM. It uses the Hyperledger Fabric framework provided by the Linux Foundation.
Alan Marquard, CLS’ head of Strategy and Development, commented:
“We are excited to be launching CLSNet, the first service of its kind to be operated on a DLT platform. Further, this offering demonstrates how we are using our unique, trusted position at the center of the FX market to solve industry challenges.”
“A standardized and automated payment netting process will lead to improved intraday liquidity, reduced cost, improved operational efficiencies and ultimately support business growth,” he added.
According to CLS, there is a lack of standardization and automation in foreign exchange netting operations, which causes several risks and inefficiencies. Today, many of these operations rely on manual intervention and are unsuitable for scaling. Thanks to the blockchain-based CLSNet, Forex market participants will mitigate risks and benefit from higher intraday liquidity.
Adam Josephart, Morgan Stanley’s managing director of Fixed Income Division, stated:
“CLSNet will deliver the standardization and automation needed for non-CLS settled transactions. We are delighted that Morgan Stanley is one of the early adopters of the service.”