Blockchain transforming the $16+trillion repo market

The repo market, or repurchase agreement market, plays a crucial role in global finance by providing liquidity and facilitating short-term borrowing between financial institutions. Essentially, a repurchase agreement is a form of short-term, collateralised loan where one party sells securities to another with the promise of repurchasing them later at a higher price. Furthermore, this market enables institutions with excess cash to lend to those in need of liquidity, often using US Treasury securities as collateral. Yet, despite diminishing since 2007, the global repo market remains significant with an outstanding size of over $16 trillion and a daily turnover of around $3 trillion. And with daily transactions volumes ranging between $2trillion and $4trillion, the repo market is a vital component for maintaining liquidity - being closely monitored by central banks such as the Federal Reserve.

This market is also essential for maintaining liquidity and stability within the financial syst…