The securities market is changing big time and stepping away from its traditional form. This challenge sets the current financial regulators thinking, as the trade of securities is shifting its paradigm. The markets need to be overhauled on a fundamental level. There’s a necessity for introducing a system of multiple ledgers with centralized control within the decentralized network architecture peculiar to the blockchain technology.
This paper proposes systematic solutions aimed at full transition of assets into the dematerialized form by means of the NEM blockchain platform. In addition, it proposes to renovate the ecosystem of the security markets through eliminating the intermediary chains in a transaction and their subsequent re-introduction.
A sheer number of ledgers is what keeps tabs on all transactions within the entire industry of securities. Its inefficiency mainly results from the need to coordinate and adjust the transactions among the ledgers.
The process utilized when conducting an exchange of a crypto-currency has proved itself efficient. Why hasn’t it found use in the traditional markets? The thing is, they represent an industry in which a multitude of dollars circulates; thus, this enormous juggernaut is very slow to take on any innovations. Moreover, in the present-day scenario, there is almost no way to introduce any changes without an all-round overhaul of the market processes.
The NEM blockchain platform can be utilized to radicalize the equity market scene. This paper provides a detailed explanation on applying NEM to the benefit of high-frequency trading.
The proposed solution provides for excluding from the equity market system the burdening elements, such as broking firms and custodians. With that, centralized depositories of securities may have to assume the role of blockchain operators. The suggested immense transformation would mark a radical, fundamental change for the better in the ecosystem of the equity market.