Mastering Blockchain - Second Edition

Post-trade settlement

This is the most sought-after application of blockchain technology. Currently, many financial institutions are exploring the possibility of using blockchain technology to simplify, automate, and speed up the costly and time-consuming post-trade settlement process.

To understand the problem better, the trade life cycle is described briefly. A trade life cycle contains three steps: execution, clearing, and settlement. Execution is concerned with the commitment of trading between two parties and can be entered into the system via front office order management terminals or exchanges. Clearing is the next step whereby the trade is matched between the seller and buyer based on certain attributes such as price and quantity. ...