If the recent findings are anything to proceed with, the future of stock market trading sure looks promising and revolutionary. Today’s blockchain holds a prominent place in determining future finance, money, supply management and more. So it is only natural to talk about the revolution blockchain will bring shortly on the global stock market.
Blockchain technology supports Ethereum and Bitcoin, two major Cryptocurrencies. It also brings out its potential to take over the stock trading market using the financial data storage and transactions that widely takes place all around the globe.
Even though it is still a burgeoning topic of aligning blockchain technology with the stock market, several reports from around the world show a prominent possibility. These varied reports suggest that the stock trading will soon be affected by blockchain as efficiently as the currencies have, if not more.
Some of the companies and trading firms that have already started implementing blockchain technology for their transactions are NASDAQ, New York Stock Exchange, ASX, India’s Security Exchange Board, the Deutsche Bourse and Tokyo Stock Exchange. Some of them have even started looking into the possibilities of how to use and benefit from blockchain technology.
How does Blockchain Technology work within Stock Markets?
By speeding up the trades and transmissions blockchain technology can make an advantageous place in the stock markets. The scheme existing right now needs the traders and brokers to go through a tedious, long and rather expensive process of completing transactions which can take 2-3 days to complete. There are many deciding factors for this, such as intermediaries, trade clearance and regulatory rules and processes as such which takes this long for transmissions.
Blockchain technology has the means, ability, and efficiency to cut back on time needed right now for completing transactions securely. Automation and decentralization are main factors that blockchain should support for this work. But the faster transmissions are just one among the many benefits.
The same technology can help with asset management and fundraising along with security management, margin financing, and settlements after the trade and analyze systemic threats. In turn, blockchain will also be able to reduce the prices on customers without the need for a mediator.
Blockchains’ core transformative factors are verifying, transferring and analyzing assets. These also happen to be the main functions of successful financial services where blockchain gets a supportive system. In the future, with the efficiency and help of blockchain solutions, the overseas trades and stock exchanges will get much easier because of the lack of intermediaries and necessary processes.
It also points towards some much-needed savings as the existing process needs close to $100-150 billion among the operation and IT expenditure. Moreover, even the security and post-trade servicing costs are amounting to $100 billion which can see a lower expense with blockchain-based security options.
The Early Adopter – NASDAQ
One of the first adopters of these future thinking was Nasdaq, a New York firm operating among finances and technology. It was the initial company that decided to adopt the bitcoin technology for its many services to allow the investors to navigate their finances globally with security and experiences the blockchain power.
Nasdaq was prominently believed to be a market for traditional investors, but today it is so much more as it develops as the leader of this industry. It continues to manufacture new and visionary security deployments for the digital finances and investing markets.
It was in 2015 that the company announced its initial security plans for using blockchain technology for digital transactions, making it the first adopter of this technology. The company also launches several indices to indicate the ability of a company to undergo a blockchain security measure.
However, for the stock market, there are some downfalls with the implementation of the blockchain. Looking at the present scenario the digital finance market will need to overcome the legal regulations with regulators and government. It will also demand a more established security standard as there will be an increased risk of scalability. A similar instance was in China where several companies lured investors by labeling themselves as “blockchain technology” when they had nothing to do with it.
China has not yet accepted the Cryptocurrencies yet, but it does embrace blockchain technology. It has allowed more companies to embark on their future transactions with the support of blockchain innovations. Interestingly, a Chinese Television show marked it as “10x more valuable than the Internet.”
Every new technology that dares to challenge the industry of this time will come with its challenges and prospects just like blockchain. But it is certainly possible for the fate of blockchain to be alike internet’s that evolved through impossible heights since the ‘90s. So it shouldn’t be difficult to assume that blockchains will soon be governing the finances and digital currencies around us. It holds potential to revolutionize the future that isn’t yet imaginable by the investors or the companies.