Actinver, BNP Paribas, Citibank, And JPMorgan Go Live on CLS Blockchain Platform

Nicholas Otieno   Feb 14, 2020 06:30 3 Min Read

CLS bank, a global foreign exchange settlement giant, has announced that four banks (JPMorgan, Citibank, BNP Paribas, and Actinver) are live on its CLSNet platform, a blockchain-based payment netting service.  

CLSNet solution is an automated, standardized bilateral payment netting service for more than 120 currencies operating on a DLT (distributed ledger technology) platform. CLS launched the service in November 2018, with Morgan Stanley and Goldman Sachs as its first customers.   

The four major banks will join Morgan Stanley, Bank of China, Bank of America, Goldman Sachs, and Intesa Sanpaolo as part of the first nine market participants to leverage the CLSNet platform, with many others expected to join the service over the coming year.  

Alan Marquard, Chief Business Development Officer, CLS said: “The addition of these latest market participants testifies the value that CLSNet is offering to the foreign exchange market.  The service continues gaining flow and participants and is efficiently operating. We will continue investing in the resilience and growth of the service and have a roadmap of enhancements, which will further expand the value proposition to clients.”

Mike Lawrence, Chief Administrative Officer, Citibank added: “We are happy to be a participant of the CLSNet solution. CLSNet provides high-quality industry standardization to previously inefficient and fragmented bilateral netting models. It will enable wider access to settlement netting as a risk mitigation enabler at an industry level while offering important operational efficiencies as the network builds.”

Brian Gallagher, Market Operations, Managing Director, JPMorgan, stated: “CLSNet will deliver efficiencies in the foreign exchange settlement for non-CLS transactions and offer other significant benefits to our foreign exchange business.”

Joe Nash, Chief Operating Officer, BNP Paribas, said: “We aim to see valuable benefits to BNP Paribas in terms of reduced operational processes and related risks and also support for business growth in the trading of non-core currencies.”

Hector Sanchez, Head of Operations, Actinver, also commented: “CLSNet technology will enable us to address our broader post-trade processing needs and enhance our operational efficiency by reducing risk, enabling real-time awareness of currency and counterparty exposures.”

Most institutions normally net with one another on a regular basis. However, the process frequently requires manual interventions and is not fully scalable. Limited payment netting also is worsened by high settlement costs in emerging market currencies in spite of their increased relevance for foreign exchange firms. 

CLSNet was developed in collaboration with sell-side and buy-side institutions. It aims to standardize and enhance the levels of payment netting in the foreign exchange market so that to enable improvements to intraday liquidity, increased risk mitigation, and greater operational efficiency for non-CLS settled currencies, which are mostly in emerging markets that are growing more rapidly than those in current CLS jurisdictions. 

CLSNet can be used directly by non-CLS banks and the buy-side firms, thus enabling a broader group of market participants to benefit from reduced operational costs and risk the service delivers.

CLSNet solution was developed in partnership with IBM and is based on the Hyperledger Fabric blockchain.

It has been a busy period for JP Morgan and Citi on the blockchain front. This week, JP Morgan announced its intention to merge its blockchain unit Quorum with ConsenSys. Last week, Citi and Goldman Sachs conducted the first equity swap on Axoni blockchain.  


Image via Shutterstock


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