Goldman, Morgan Stanley Go Live With CLS' IBM-Powered Blockchain

CLS, the bank-owned currency trading utility, and IBM have gone live with their blockchain-based payment netting service after more than two years in development.

Along with the food-tracking blockchain IBM Food Trust launched in October, and the trade finance platform we.

Trade, which went live in late June, CLSNet is the third blockchain consortium powered by IBM tech to go into production this year.

"With CLSNet now in production with two of the world's largest banks, for a major market function, it is a testament to the ongoing maturity of blockchain technology and the value that it can deliver in practice," said Marie Wieck, general manager at IBM Blockchain, in a press release.

A limited number of participants currently net trades with each other on a regular basis, and even when they do, often there is a need to manage the process manually, according to IBM and CLS. In addition, many participants do not net the payments for forex trades, instead settling on a gross basis, which exposes them to settlement risk and leads to higher intraday liquidity demands, the companies said.

CLS and IBM developed CLSNet on the Hyperledger Fabric blockchain.

CLS has been experimenting with blockchain technology since early 2015, before the Hyperledger consortium started.

Those attempts eventually grew into CLSNet, with Bank of America, Bank of China, Bank of Tokyo-Mitsubishi UFJ, Citibank, Goldman Sachs, JPMorgan Chase and Morgan Stanley on board when the project was unveiled in September 2017.

From the beginning, CLS worked with IBM on blockchain solutions.

CLS and IBM have expanded their collaboration.