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Future is blockchain in financial markets

Blockchain in financial markets: Nasdaq, ABN Amro Clearing, EuroCCP and Euroclear announce a securities trading tool based on the blockchain network.

Future is blockchain in financial markets: Leggi qui¬†l’articolo in Italiano

The news is destined to make a noise among companies dealing with financial markets, in particular, stock exchanges and derivatives. Four companies, namely NASDAQ, ABN AMRO Clearing, EuroCCP and Euroclear jointly announce the launch of a new securities trading tool.

Not only that, but marginal operations will also be carried out outside the opening hours of the financial markets, all based on the blockchain. At first glance, a real revolution for the whole sector.

The solution is based on an innovative PoC protocol (proof of concept) that has proven to be able to create a resilient network, fast and secure, but above all able to manage financial transactions by solving many inefficiencies resulting from the management of collateral of CCPs (Central Counterparties).

The problem solved by the blockchain emerges from the CCP regulations and the European EMIR (European Market Infrastructure Regulation) for the bilateral derivatives treated Over the Counter. The directives of the Old Continent, in fact, require that such derivatives must be immediately covered by collateral in euros. This has so far severely limited trading times, which were therefore linked to the operating times of banks.

The new PoS platform, on the other hand, allows separate transactions from the credit system. In addition, there is now the possibility for operators to optimize the collateral used.

Coen van Walbeek, global head of AMB AMBRO’s treasury department, said: “With a faster and more globalised market, it is essential to make the processing of collateral more efficient. Expanding the possibilities to use securities as collateral will make clearing through CCPs more attractive and cheaper for buy-side market participants.”

With the success of this blockchain implementation NASDAQ can become a real exchange for cryptocurrencies.

Fabio Lugano
Fabio Lugano
Graduated with honors from Bocconi University, Fabio is a consultant for companies and wounded shareholders of the Banche Venete. He is also the author of "Scenari Economici", and lecturer and analyst of cryptocurrencies since 2016.