While stock markets across space are rapidly embracing the native capabilities of blockchain technology, the overall cryptocurrency market with several broad sectors is seeking to explore how they can use blockchain technology within the global stock market.
“Today, blockchain- the technology behind the digital currency bitcoin might seem like a trinket for computer geeks. But once widely adopted, it will transform the world”- Ginni Rometty, CEO of IBM
As the time is gushing away, the popularity of blockchain is skyrocketing; more likely to expand and revolutionize an integral part of capital markets. The working of stock markets involves complex time-consuming procedures, high costs, and risks. However, the application of blockchain technology could reduce the risks and issues coming forth stock market.
Blockchain technology is already working with the future of money, supply chain management, finance, record keeping, and many more sectors. Now it is not only supporting cryptocurrency but also revolutionizing the stock trading marketplaces. Also, it helps to adopt the ways to store and transmit the financial data across the globe.
Blockchain for Stock Market
First of all, the blockchain is proven the solution to trust, interoperability, and transparency problems in division market systems.
The participants of the Stock market including regulators, traders, brokers, and stock exchanges have to go through a cumbersome process. However, this process almost requires more than three days accomplishing the transactions. The key reason lies with the role of operational trade clearance, intermediaries with regulatory procedures.
Using Blockchain technology can make these processes more optimal via automation and decentralization. It can minimize the huge costs levied on customers with regards to the commission. Additionally, this speeds up the process and incorporates quick transaction settlements.
This technology can show viable use to clear and settle the issues, while safely automating the post-trade procedure with easing trade paperwork and legal ownership security transfer.
Blockchain removes the third party regulatory system to a large extent, in-building the rules and regulations within smart contracts. However, this enforces each trade to register transactions with the blockchain network for regulating all transactions.
The New York Stock Exchange, Nasdaq, the Tokyo Stock Exchange, Deutsche Bourse, as well as the Securities Exchange Board of India, competitively have already begun using the blockchain technology. Moreover, they are either using for some transactions or to appoint commissions for studying the viability to use blockchain technology in the future.
Blockchain Adoption and Innovations
There are many ways blockchain innovations will revolutionize the financial system. Some of them are:
- Paying with cryptocurrency
The rise of cryptocurrency has twirl cryptocurrency into viable currency.
- System integrity
One of the upside for using blockchain is system integrity. Cryptocurrency and blockchain technology seems to remove the need for central authority.
- Regulatory concerns
The exciting feature of Blockchain application is cross-border transactions which simplify many of the concerns.
- Mainstream banking adoption
The majority of sectors are already starting to develop infrastructures adopting the new digital assets and payment systems operating on blockchain technology.
- Financial Automation
Blockchain has many interesting applications which potentially automating every procedure and payments, optimizing the stock and finances.
Currently, there are smarter blockchain technology networks, great cryptocurrencies with enhanced infrastructures in development by several firms and groups. However, moving ahead, blockchain technology is all set to entirely revolutionize the financial and stock industry before the next decade.