1)What problems can the blockchain solve for the stock trading industry?
Blockchain is the answer to compatibility, trust, and transparency issues with the current stock market systems. Stock market participants, such as traders, brokers, regulators, and stock exchanges are required to go through a cumbersome process. Transactions can take over three days to complete, mainly due to the role of intermediaries, operational trade clearance, and regulatory processes. Blockchain can make stock exchanges much more optimal through automation and decentralization. Simply put, the advantages of blockchain are:
- Reduced costs
- Secure data
- Faster processing times
- Better information gathering and research
2) Why does the stock trading industry need blockchain?
Blockchain has the ability to optimize stock exchanges through automation and decentralization. It increases fairness, transparency, and efficiency. By cutting out the middleman and automating the trade process, it drastically reduces commission fees and significantly speeds up the transaction settlement process, thus increasing liquidity and leading to more investment. Blockchain authentication and verification also serve as a mechanism for risk containment.
3) What are the top use cases for blockchain in stock trading?
The top use cases for blockchain in stock trading include:
- Stamping out fraud: By assigning a digital fingerprint, blockchain authentication enables the verification of ownership and can help to eliminate fraud.
- Stopping hackers: Blockchain’s distributed ledger technology makes it be virtually impossible to alter or destroy any part of the blockchain, thus making it hack-proof.
- No third parties: Through the automation of processes, blockchain eliminates the middleman, thus increasing efficiency and reducing costs.
- Bringing efficiency to the supply chain: Blockchain will drastically reduce, even completely eliminate paperwork, saving time and resources in the supply chain.
4) What are the top companies using blockchain to disrupt stock trading?
Some of the leading companies that have adopted blockchain include the Nasdaq, Australian Stock Exchange (ASX), Japan Exchange Group (JPX), Korea Exchange, Deutsche Börse, and Santiago Exchange.