Blockchain: Twinkling Revolution in Capital Markets
capitalmarketsciooutlook

Blockchain: Twinkling Revolution in Capital Markets

By Capital Markets CIO Outlook | Thursday, July 18, 2019

The fascination of blockchain for capital markets has exploded with investments, to meet the ever-evolving business demands.

FREMONT, CA: Capital issuance via a digital ledger proposes not only greater liquidity, but some notable efficiencies and savings as well. Many strategists and innovators are considering the future of blockchain in capital markets, including the potential impact of cryptocurrency regulation. Cryptocurrencies and the emergence of blockchain is a subject of modern investment banking digitalization. Capital disbursement via a digital ledger significantly cuts expenses and reduces the time-to-market from months to days. Bitcoin and other cryptocurrencies are all over the headlines currently, given their precipitous decline in value since the inception of the year.  

A financial solution providing companies have been now developing blockchain-based services. Initially, cryptocurrency services were not getting much customer interest until pricing of various cryptocurrencies, went off the charts. The oracle framework for distributed ledgers has been used to provide off-chain market data. Capital distribution via a digital ledger such as blockchain proposes not only greater fluidity, but fascinating significant efficiencies as well.

The big questions that prevail are not so much about the method, technology or investor appetite, but regulatory strategy. Regulators like to categorize, and pigeon-hole products and that is not perpetually easy for crypto assets,  which are constrained to more meaningful inflection. The approach is to think in terms of whether an asset is backed and whether it is fungible. Exchangeable and backed would be where people represent old financial salvation.

There is uncertainty in regulatory, and the competition is also growing. Such organizational change is opening up the global race to capture the industry. The rationale is not to solicit regulatory laxity but a regulatory assurance to safeguard against any retrospective criminalization. Proper regulation is likely to serve the purpose.

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