Financial markets powered by distributed ledger technology (DLT) could save $100 billion annually

Finance


The use of distributed ledger technology (DLT) in the stock market could save more than $100 billion annually, according to a report produced by a large traditional finance lobby group.

In a report released Tuesday night, the Global Financial Markets Association (GFMA) called on regulators to allow the technology underpinning cryptocurrencies to support collateral management, asset tokenization and sovereign bond markets. .

“Distributed ledger technology holds promise for driving growth and innovation,” said GFMA CEO Adam Farkas. GFMA’s US, European and Asian affiliates include members of leading companies such as JPMorgan Chase, HSBC and Nomura.

Farkas added, “If regulatory oversight and resilience measures already exist, this possibility should not be ignored or prohibited,” adding that a harmonious approach to linking DLT-based markets should be pursued. He called for the construction of an international framework that

The release of unpaid collateral in areas such as derivatives and securities lending could save over $100 billion annually from a market worth about $19 trillion, using smart contracts to implement stock splits and Automating the merger settlement and corporate action processes could save $15 to $20. The report says operating costs have been cut by $1 billion.

The survey reflects growing enthusiasm for the use of DLT by traditional financial players.

Brussels-based clearing and settlement specialist Euroclear will soon release a new platform for trading DLT bonds, and the European Central Bank is looking at ways to improve the interaction between financial payment systems and decentralized technology. ing.



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