Bitcoin blockchain technology draws attention from securities market

The SWIFT Institute has invited researchers to conduct a study to explore the impact of blockchain technology on the global securities ecosystem and has provided a €15,000 grant.

Although blockchain technology is currently mainly related to Bitcoin, it is increasingly attracting attention from the securities market. Recently, Johann Palychata, an analyst at BNP Paribas, claimed that distributed ledgers could lead to a complete subversion of outdated trading infrastructure. Currently, Nasdaq OMX Group and UBS are actively exploring the potential of blockchain technology.

In addition, blockchain technology also provides fast, irrevocable and transparent clearing and settlement capabilities.

SWIFT Academy hopes that researchers applying for the grant will seek to answer some of the following questions:

1. How does what happens on the blockchain compare to the current securities transaction cycle? What is the optimal design of a distributed ledger and blockchain-based system to replace the securities cycle processing? Will it repeat the settlement instruction cycle? Can real-time delivery of relative payments be achieved?

2. What impact will it have on the intermediaries in the current securities trading cycle (such as custodian banks, CSDs, etc.)?

3. What will be the impact on transactions where part of the lifecycle is on the blockchain (e.g. settlement), and others may not be on the blockchain (e.g. trade execution)?

4. What are the costs and risks of securities trading on the blockchain? Will risks (e.g., settlement, operations, etc.) increase or decrease? How will this affect costs? Who will be responsible for building a global blockchain environment for the securities industry? Who will benefit from the resulting cost savings?

5. What are the technical requirements for global securities trading processing to use blockchain technology? How does this compare to what exists today?

Grants & Research Manuscripts

A grant of €15,000 will be awarded to selected authors, funded by the SWIFT Academy. 50% of the grant will be paid immediately, and the remaining 50% will be paid after the manuscript has been accepted.