Those readers who have been following the blockchain genesis may recall some of the early developments since 2015. One of these was the establishment of the R3 consortium out of New York, which later went on to develop Corda, a DLT platform, and then Conclave, a data-sharing system to pool information and develop new applications.
This posting in Ledger Insights discusses a startup out of Singapore named OneHypernet, which will use Conclave as part of the network connecting FX markets in a decentralized way.
‘Today enterprise blockchain firm R3 announced a partnership with Singapore startup OneHypernet. The new company is creating a netting solution for cross-border payments which aims to significantly reduce the number of payments a company needs to make, saving payment costs – it claims by 96% – and shortening times.’
Those who follow cross-border payments space will have some familiarity with the need for FX operations given the currency markets and value fluctuations on a daily basis. So correspondent banks may settle payments on a per transaction basis or by netting, depending upon the agreed terms. The posting explains that OneHypernet plans to create a decentralized net settlement network via blockchain, rather than a centralized version, which is more common.
This broadens the potential market and potentially allows for netting across multiple currencies, reducing transactions and improving liquidity. The piece indicates that the startup has a POC grant from the MAS, so it should be making waves relatively soon.
“’The correspondent banking model is currently the only ubiquitous settlement solution for cross-border payments. As a system of bilateral relationships, operational processes and liquidity requirements are duplicated across the correspondent banking chain,’” said Alstone Tee, Co-Founder of OneHypernet….’Our partnership with R3 solves this by connecting global markets on a common ledger, enabling a real-time shared view with standardised protocols and data privacy. When privacy is preserved, all foreign exchange positions can be included in the same settlement cycle. This allows for a true multilateral, multicurrency settlement system, eliminating duplicative processes and liquidity costs. Through our network, we enable banks to unlock liquidity trapped in nostro/vostro requirements, perform faster pay-outs, and eliminate cross-border settlement risks.‘”
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
