Five Ways Blockchain Is Leveling up the Investment Domain

Five Ways Blockchain Is Leveling up the Investment Domain

By Capital Markets CIO Outlook | Thursday, January 10, 2019

Initially, cryptocurrency and its backbone blockchain technology were innovations that were expected to be avoided; however currencies like bitcoin and ethereum climbed in value in 2018. As a result, businesses planned to develop cryptocurrency investment products as this trend would infuse more capital into the digital currency markets to enhance transparency.

Digital currencies are not only disrupting the traditional, financial and investment industries but are also transforming the entire face of investments. Let’ see how:

1. Minimizing the Settlement Tenure: Traditional trading processes require three days for settlement. But blockchain innovation has speeded the process and reduced the time to one day or at times a few hours. But with the broader adoption in the future, public blockchain may become congested, and therefore it is advisable for the developers to address this issue.

2. Reduction in Trading Cost: As per a report by Oliver Wyman, an international firm has estimated that IT and operations costs in the capital market is nearly $100-$150 billion in a year. Blockchain technology provides clear and immutable storage of investment transactions thereby capitalizing on public Blockchains.

3. Trading for Global Markets: Blockchain can open global markets for 24/7 trading which further eliminates the need to wait until a market opens to continue the trading process. Hence, blockchain has resolved the issues of exchanges as there are differences in the hour of operation.

4. Tokenization of Assets: Blockchain enables an individual to sell partial investments through the blockchain tokenization process, all of which is recorded and stored in a secure and immutable framework. Certainly, blockchain technology private equity trading which simplifies P2P exchanges of particular coins don't require an intermediary.

5. Reduced Fraudulent Activities: The distributed ledger technology which is a shared and synchronized digital data with no central authority has provided a secure and transparent framework thereby minimizing the risks of fraudulent activities. It is reinforced by digital currency investment groups and exchanges getting on board with Know Your Customer (KYC) compliance.

These five changes are just a gist of how blockchain will be transforming the investment world. Sooner or later, the adoption of blockchain will become a must as it will be a perfect fit to allure the savvy investors towards the products and services. 

See Also: CIOReview Magazine 

Weekly Brief

Top 10 Hedge Fund Consulting/Service Companies 2020
Top 10 Hedge Fund Solution Providers 2020