Spanish banking giant BBVA and Mexico's largest financial institution, BBVA Bancomer, are moving ahead with the testing of an FX matching service built using distributed ledger technology.

Announced today in conjunction with the annual Sibos conference, the pilot was engineered by cloud-based asset trading solutions provider Calypso Technology and enterprise distributed ledger software firm R3. As put forward by participants, the pilot aims to provide an alternative to the slow and costly systems and processes used for FX trade matching today.

In statements, Ramon Martinez Sobrado, global head of CIB Operations at BBVA, lauded the work as a step toward achieving those lofty goals. Still, he also made clear it is in many ways an exploration of how distributed ledgers could be applied in finance.

Sobrado said:

Elsewhere, press statements explained how the use of DLT for this use case is believed by the parties to be able to reduce costs while simplifying operations and enhancing efficiency.

Representatives for Calypso, for example, expressed their enthusiasm that the project would move forward with further testing designed to test these assumptions. Already, Mayank Shah, the company's head of strategy, marketing and alliances, said the partners are moving into the next phase.

Speaking also of the wider implications was Todd McDonald, co-Founder at R3, who expressed confidence that the trial, if advanced, could lead to back-office cost savings by replacing "whole departments" devoted to reconciliation with a distributed ledger.

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