A variety of capital markets play a vital role in the modern economy. Some examples include pensions, life insurance, and stock exchanges. Undoubtedly, various capital markets will continue to evolve over time along with technical innovation. Here’s how blockchain is beginning to improve the way that capital markets operate.
Settling International Trades Between Banks
Handling trade settlements has been one of the biggest technical challenges for traditional, online banks in the past two decades. The process is far from streamlined. For example, US banks often need to transact swap contracts with European banks (and vice versa). This process doesn’t seem like a major task in the fiat economy. However, it is actually quite difficult to accomplish with traditional technologies. This is mostly due to regulatory risks.