CLS And IBM To Build Blockchain-Based Payment Netting Service

CLS Group, a financial services company that provides settlement services to its members in the foreign exchange market, announced its plans to build a payments netting service for trades using Blockchain or Distributed Ledger technology.

A new netting service will be built in partnership with IBM and using Blockchain technology based on Hyperledger Fabric. It will allow CLS to cover more currencies and standardize those bilateral processes.

David Puth, CEO of CLS, commented:

“Working with our settlement members and the buy-side, we have developed CLS Netting to address these challenges. The service will leverage our unique infrastructure, expertise and position as a trusted post-trade partner. It is a significant step forward in reducing risk and providing further efficiencies and resilience across the global FX market. CLS Netting is a critical component of our strategy to deliver a comprehensive suite of post-trade and risk mitigation services for the entire FX market.”

According to the announcement, participants will be able to submit FX instructions for six products and 24 currencies over existing SWIFT-based channels. It will include non-CLS-eligible currencies like the Chinese renminbi, Russian ruble, Polish zloty, Turkish lira, Thai baht and Czech koruna. However, CLS plans to include more currencies.

Martin Jetter, Senior Vice President at IBM Global Technology Services, said: 

“This is an example of the type of transformational change that distributed ledgers and permissioned blockchain networks are bringing to the financial markets and other industries.”