{"id":1512,"date":"2021-02-15T13:52:11","date_gmt":"2021-02-15T12:52:11","guid":{"rendered":"http:\/\/szzccmv.cluster031.hosting.ovh.net\/?p=1512"},"modified":"2021-10-26T18:22:19","modified_gmt":"2021-10-26T16:22:19","slug":"how-blockchain-is-transforming-the-financial-markets","status":"publish","type":"post","link":"https:\/\/n.world\/en\/how-blockchain-is-transforming-the-financial-markets\/","title":{"rendered":"How Blockchain is transforming the Financial markets"},"content":{"rendered":"

Some of the <\/span>main Financial Institutions at the international level <\/b>are focusing on the implantation of blockchain technology as a technologic alternative, benefiting from a reduction in time and costs, while increasing security in the transactions.<\/span><\/p>\n

How can blockchain help to manage Financial institution\u2019s information?<\/b><\/h2>\n

Banks and other Financial Institutions have increased their inversion in technology and innovation during these last years, pursuing a simplification and reduction in the costs of back-office processes.<\/span><\/p>\n

Proof of this is the decision of <\/span>the Australian ASX<\/b><\/a> (Australian Securities Exchange), who has recently announced that it will change its clearing and settlement system for a new one based on<\/span> blockchain technology<\/b>. This will allow the reduction of costs for its clients and the development of new services. Furthermore, it will achieve more efficiency through a better maintenance of the records, transactions and better quality data.<\/span><\/p>\n

The Australian Federal Government supports the <\/span>ASX<\/b> commitment with the implantation of this technology, which will strengthen the national Financial system via better efficiency. It also supports the innovative initiatives that will put<\/span> Australia at the forefront of innovation in Financial markets, being a globally competitive nation<\/b>.<\/span><\/p>\n

Another official Institution, <\/span>the Canadian CSE<\/b><\/a> (Canadian Securities Exchange) has also developed a <\/span>clearing and settlement platform based on blockchain<\/b>, which allows the reduction of risks for investors, distributors and clients, ensuring the immediate settlement of exchanges.<\/span><\/p>\n

The development of this platform represents the meeting point between blockchain and Financial markets,<\/span> thus revolutionizing the conventional transactions and record keeping<\/b>.<\/span><\/p>\n

\"CSE,
CSE, Blockchain.<\/figcaption><\/figure>\n

In the Market field,<\/span> the distributed accounting system<\/b> brings great possibilities to the non-affiliated operators, but this is not the only area of impact. Blockchain benefits for Capital Markets in commercial life are countless, particularly affecting the <\/span>post-negotiation<\/b>.<\/span><\/p>\n

But blockchain is already being used in other fields of the Financial sector, like the <\/span>Smart Contracts <\/b>(Swaps case).<\/span><\/p>\n

With the creation of Smart Contracts,<\/span> blockchain application is viable to extrapolate specific data or to carry out specific instructions<\/b> whenever certain parameters are activated.<\/span><\/p>\n

The Smart Contract allows the automatic processing of payments, <\/span>only if some requirements are met <\/b>within the agreed contract. As a result of Smart Contracts, the costly mistakes of the manual processing of the settlement instructions can be considerably reduced. <\/span><\/p>\n

As all the parts will have access to the same data, the transparency benefit would eliminate the<\/span> need of a manual settlement confirmation<\/b>, thus decreasing the conciliation problems that sometimes arise when transactions are not carried out properly.<\/span><\/p>\n

Reduction of the violation of the trading limits<\/b><\/h3>\n

The commercial activity within Financial Institutions includes operations<\/span> to cover market positions and also cover existing positions for the bank <\/b>as a whole in different instruments.<\/span><\/p>\n

These operations are carried out with other Financial Institutions and they are complex. The <\/span>trading limits<\/b> within an institution are valid for notional amounts and settlement dates. <\/span>There are size limitations for the position by intermediaries, also for specific instruments that include <\/span>Financial derivatives<\/b>, options, fixed income and currency hedges.<\/span><\/p>\n

Violations of the trading limits may be very expensive for Financial companies. <\/span>Any suspicious activity<\/span><\/a> being out of compliance<\/span> could be detected and redressed<\/b> before it affects negatively to the position, the gains and losses and the general balance of the banks.<\/span><\/p>\n

JP Morgan and its anticipation strategy<\/b><\/h2>\n

By the end of last year, <\/span>JP Morgan<\/strong> announced that it was developing a program based on blockchain technology<\/span><\/a>, designed to <\/span>analyze data in sales transactions<\/b>, and group data pursuing a preventive and predictive utility (trader behavior analysis).<\/span><\/p>\n

This operation intends to<\/span> make the traders decisions easier<\/b>, proving real time data, integrating investment patterns sequenced in an easy way for the user. This way, the learning gap is reduced and it offers immediate functionality. <\/span><\/p>\n

This kind of technology application is not new, the stochastic orientation seems to be <\/span>the Holy Grail of the investment of the Financial Markets<\/b>. This reality is already being applied, and a lot of investors and intermediaries are benefiting from it.<\/span><\/p>\n

Other examples in the use of Blockchain<\/b><\/h4>\n
Bitcoin<\/b><\/h5>\n

Satoshi Nakamoto <\/span><\/i>design <\/span>Bitcoin Blockchain<\/b> as a distributed ledger to record transactions and the transfer of tokens among interconnected networks.<\/span><\/p>\n

Payment platform<\/b><\/h5>\n

Companies and stock exchange councils are working with blockchain in order to get a global change in transfers and transactions. This month, for instance, the Financial communications company <\/span>SWIFT<\/b> announced the success of the proof of concept (PoC)<\/span><\/a> in the development of the distributed accounting platform, an ambitious proof of concepts developed within emerging technologies.<\/span><\/p>\n

By developing this platform, the purpose is to maximize the <\/span>cross-border payment settlements<\/b>, to reduce costs and operational risks.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Some of the main Financial Institutions at the international level are focusing on the implantation of blockchain technology as a technologic alternative, benefiting from a reduction in time and costs, while increasing security in the transactions. How can blockchain help to manage Financial institution\u2019s information? 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