Blockchain in Capital Markets: More Evolution than Revolution
4 stars based on
53 reviews
Blockchain is indeed rising as one of the biggest revolutionary technologies for a number of industries, as discussed in last few posts of TheBlockchainAcademy. We have been in the process of highlighting the potential of blockchain to the best we can, since it is expected to transform the way various industries work, to an incredible extent.
This time the industry we have selected to discuss in regard to expected blockchain impacts upon it, is capital market and global trade finance. This industry is of prime importance since majority of the digital transactions around the world are carried out here, both with higher returns and risks involved.
Blockchains are developed on the stream of innovations in organizing and distributing data. The aim is to develop a single truth version, used by all the parties or participants, containing a much enhanced dataset than exist in any of the system today. This is then going to enable novel industry processes to be created, based on the use of transparent immediate and real time data settlement of transactions and the extension of auto-implementing smart contracts having encoded business logic in the ledger[2].
Saving and agreeing the datasets of financial blockchain in capital markets operations and obligations makes the fundamental basis of capital market operations. The existing method are very complex, use fragmented data and IT architectures and become the victim of absence of common standards.
This leads to the need of data reconciliation with massive systems and the process duplication, causing high protracted time to carry out tasks and costs. Is blockchain the structural change that market is looking for? The vision of blockchain is clearly a huge change to the capital market structure. In order to understand why the markets will go with it, it is necessary to consider the benefits blockchain brings for pre-trade, trade, post-trade and the securities servicing[3].
Blockchain pledges to streamline the process of trade finance. A blockchain is the data structure than enables the blockchain in capital markets operations of digital ledger of the blockchain in capital markets operations, which can be distributed in the digital network via cryptography[4].
Hence, through this approach, every participant who is on the network can safely change that ledge with no need of central authority. Since blockchain in capital markets operations blockchain is updated in real time by every participant on the network to show the latest transaction, it eliminates the need of various copies of the same information document saved across databases under various entities. For instance, with a conventional trade finance system, the exporter, importer, bank, shipper etc must all have their own databases for all the documents related blockchain in capital markets operations the transaction.
Each of the databases need to be blockchain in capital markets operations on constant basis against each other, and if there is some error in a document, measures must be taken to identify which copy of the document if any is correct[5]. A single blockchain may symbolize all of the essential information in single digital document, which is then updated almost instantly and can be seen by all members present on the network at the same time.
Join our mailing list to receive the latest news and updates from our team. Don't worry, your information will not be shared. Stay connected with news and updates! Receive News and Updates! Categories All Categories blockchain ethereum forex trading global freight ipfs private blockchain public blockchain scalability smart contracts technologys tor. Smart Contracts and the Blockchain. How Cryptocurrencies Aid in Disaster Relief.
