A pilot transaction involving ANZ shows digital ledgers can help businesses better optimise their liquidity management in cross-border transactions, according to ANZ Banking Services Lead Nigel Dobson.
In September, ANZ announced it had helped complete one of the first live corporate treasury transactions [SW1] using tokenised deposits, in a move it says demonstrates the technology’s potential to transform the cross-border payments space.
The transaction — part of the Swift Digital Ledger Pilot that ANZ, as well as 16 other global banks, is participating in — saw resources giant BHP use its existing ANZ account to send money to a Citibank account in the United States of America, all through the use of tokenised deposits and Swift’s digital ledger.
The pilot transaction was completed in near-real time. Watch the video below to find out more.
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Dobson said the test had showed transactions of this type could provide corporate treasurers with the option to “move money instantly”, providing “immediate access to a funding source… no matter what time zone”, with no need to prefund an account, in what amounted to “24 by seven global liquidity”.
“It means [businesses] can maximise yield in whatever currency they want to hold the funds in before moving it… into another account in another jurisdiction,” he said.
“They are getting optimised liquidity. They're managing to, in many cases, optimise the yield that they get in the currency of their choice, but ultimately making the commitment to settle transactions in the jurisdiction of their choice by simply moving it across the Swift digital ledger.”
Outcome
Payments of this type using digital ledger tech will allow businesses to focus on what’s most important to them, Dobson said: outcomes.
“That was the feedback we got from BHP,” Dobson said. “‘The technology I trust, just give me the outcome.’”
ANZ is the first, and so far only, Australian bank to use Swift’s blockchain ledger. Swift’s communication network supports a wide range of payments around the world, and ANZ worked to help design “an extension of that network” with distributed ledger technology, according to Dobson.
The project is an acknowledgement “on-chain capability is here and now”, he said on video.
“And tokenised deposits can, in many cases, be delivered by banks and used for the purposes of moving liquidity cross-border,” he said.
