Blockchain, or distributed ledger technology (DLT), and smart contracts are going to revolutionise agility in many areas of the banking industry, including capital markets, according to Shaul Kfir, co-founder and chief technology officer at DLT start-up Digital Asset. “And this will happen without having to give up any of the robustness or security that financial institutions expect,” he says.
DLT can help fix existing IT inefficiencies, as well as lay the foundations for an ideal future technology infrastructure. Mr Kfir uses the example of clearing and settlement, which is a complex series of transactions that involve dozens – sometimes hundreds – of entities that need to record part of a trade lifecycle. A central counterparty helps to reduce the complexity; however, with centralisation comes privacy issues and settlement delays.
