CLSNet is a new Distributed Ledger Technology (DLT) backed by CLS and IBM. It is now up and running, even being used by Goldman Sachs and Morgan Stanley for their forex transferring needs. CLSNet is a standard automated bilateral payment service used for over 120 fiat currencies, operating on Hyperledger Fabric blockchain that was built in collaboration with IBM.
The CLSNet services, that took over two years to build to completion, is meant to standardize and increase levels of net payments in the forex markets. CLSnet will have financial transactions with over 120 fiat currencies in the market. By having a standardized automated system in place it can reduce the cost for participation in such markets. It will also increase net payments, thus increasing liquidity in the forex market.
Premier financial institutions, such as Goldman Sachs and Morgan Stanley, will also be using the new CLSNet platform. Six other financial institutions from North America, Europe, and Asia will be integrated in the system as well in the upcoming months, including the Bank of China (Hong Kong).
This is the third blockchain service that has been built in cooperation with IBM this year. Already implementing blockchain technology, IBM helped launch the financial platform called we.trade in June, and IBM FoodTrust that was launched in October.
Alan Marquard, the chief strategy and development officer at CLS, was excited about the platform's release. Marquard stated, "A standardized and automated payment netting process will lead to improved intraday liquidity, reduced cost, improved operational efficiencies and ultimately support business growth."
CLS, though not a well known name, has extensive experience in the forex trading services. CLS was founded in 2002 and its original purpose was to help mitigate settlement risks that are inherent in the forex ecosystem, for banks that participated in the market. This new technology will help streamline and navigate the potholes in the market.
With its new IBM backed DLT in place and major financial institutions willing to be on the platform, CLS is at the forefront of the forex markets. Its stated goal is to put in place a standardized and automated system in the market that will help mitigate risk and be the leader in terms of non-CLS forex trading too.