Using Blockchain to Achieve Capital Growth

Capital Markets CIO Outlook | Thursday, February 07, 2019

Evolution of business models is not a topic to stock exchanges. Most exchanges have historically been self-regulated and mutual bodies serving their brokers, and annual membership dues have mainly driven the revenue. Bursaries charge traders a fee for the acquisition and sale of inventories on a commercial floor. Today, most stock exchanges became profit companies with revenues in various ways such as listings and issuers, trading, technology and software, and sales of market data. The global stock market will undoubtedly continue to develop its corporate strategies. In the developing world, entrepreneurs seek capital and investors seek opportunities. For them both, Blockchain is the answer.

With unprecedented technological growth across a number of sectors, the world is becoming more and more borderless. However, the global financial landscape remains firmly fixed geographical and economic frontiers that prevent emerging markets from accessing the capital- growth field. Blockchain offers great potential to track the loans and repo and financing of securities, as well as systemic risk monitoring. By automation and decentralization, Blockchain can make stock exchanges much more optimal. It can help to lower large commission charges for customers while accelerating the process of quick settlement of transactions.

Check out Capital Markets CIO Outlook’s Top Blockchain Solution Providers - BLOQ, Cognive, Global Debt Registry,...

The implementation of blockchain for post-trade activities can eliminate the need for intermediaries enterprises, eliminate counterparties, and reduce operational risk while providing a faster settlement infrastructure. The major benefits of these financial institutions are to simplify real-time settlement, enhance cash flows and optimize their supply chain as well as increase transparency in a few minutes, instead of several days. Blockchain can even offer a post-commerce solution.

Blockchain can act as an automated online monitoring system for each transaction if implemented. A blockchain-based exchange can incorporate tracking, blocking and reporting features of illegal attempts made on the network and provide a robust platform for implementing security policies and standards. Since the blockchain ledger has been programmed to provide all individuals a complete track record and therefore, investor holdings, it can bring greater transparency and confidence to the market.

The possibility of disrupting and decentralizing the conventional financial market, especially in the redefinition of the bonds, could be the most exciting element of the blockchain technology. The core values of unbounded, decentralized, and accessible platforms are exploited by decentralized exchanges, to enable developing nations to acquire unparalleled power. In emerging markets and beyond, blockchain has the capability to encourage change and capital growth.

Financial

Supply Chain

Securities