How Can Stock Exchange Industry Benefit from Using Blockchain Technology?August 16, 2018
The finance sector is experiencing a lot of seismic transformations at present, along with fintech proving to be a substantial disruptor. Further, given the amount of money and time being used on blockchain research by different giant institutions, there’s more optimism surrounding the future capacity of this technology.
However, it’s not only the banks which are boosting their exposure in the blockchain. Stock exchanges around the globe are now discovering how best they can control the technology, unvaryingly as a process to enhance efficiency and cost.
Because of the nature of blockchain, there are countless advantages. These all can be facilitated in a wide array of fields like asset registries, smart contracts and other legal and financial use.
Blockchain technology cuts inefficiencies. That results in lowered costs and entry barriers. It denotes a lot of people for whom the markets were not accessible because of such barriers, can participate. It also denotes greater liquidity, and who doesn’t want liquidity?
Greater Transparency & Security
Blockchain-based exchange can feature inbuilt features which can block and report unwholesome attempts made by anybody in the network. It enables for more transparent supervision for market experts. The limitations put on policymakers because of the shortcomings of the system can be eradicated. They can obtain policy goals without diluting standards. That can extremely speed up the economic development of the globe.
Blockchain ledger is built in such a way that every participant has a complete record of the transactions and holdings of the investors. That brings total trust and transparency in the market.
For instance, the XDC (XinFin) ecosystem will offer easily accessible light wallets which will connect safely to full nodes. Every light wallet will have unique keys which are utilized to sign transactions from their respective accounts. Since the light wallet is considered a standalone application, the possibility of being hacked or losing XDC tokens becomes impossible.
Fewer Transaction Fees
Blockchain transaction is much quicker than any other cross-border transactions at this time. Peers make the trade confirmations than of any third party. Most of these can be almost instantaneous.
For instance, remitting cash from one nation to another takes at least two to three days. Alternatively, blockchain application like XinFin is built to do this within a few minutes. It should not be difficult to visualize the impact of this effectiveness and the effect it would present on the global economic progress.
Presently, there are lots of entities in the stock market like stock exchange, regulators, and brokers. Blockchain can transform the stock exchange to become decentralized. The technology can impose the regulations and rules and ensure 100% compliance. It would not only lessen big cots on customers when it comes to commissions. It will also speed up the procedure leading in much quicker transaction settlements.
Given the undiscriminating and decentralized nature of blockchain, it’s clearly encouraging to see the technology being almost uniformly adopted across the whole breadth and length of the world.