How maturing blockchains can speed-up settlement and improve collateral management

Written by Richard Baker, Founder & CEO of Tokenovate

With the growing maturity of blockchains - both in terms of available technology and public perception - is the timing now right to address the problems associated with delayed settlements? And, can blockchain-based solutions also enhance the way collateral is managed? The market problems with T+2 are well-known: inefficient, inaccurate and incomplete processes cost money, tie-up liquidity and limit commercial opportunity. Managing the full lifecycle of a trade is still highly manual and unfortunately littered with errors. That said, existing financial market infrastructure is improving, but it is still underpinned by traditional thinking and dated technologies. Data silos and disparate systems remain intact.

Why is that?

Let’s look at some of the root causes of the problem. First, the lifecycle of a trade is a complicated process that involves numerous actions that are triggered by ongoing events and must be completed by the stakeholders. Counterparties of a trade, governed by an ISDA,…