Leading the change with blockchain

Leading the change with blockchain

by Thomas Yuk, Director, Client Relations (Insights and Propositions) at Croesus

In today’s technology landscape, you will notice the term blockchain popping up everywhere. This is especially true if you are into trading cryptocurrencies such as bitcoin. So, what is all the buzz about blockchain?

Defining blockchain

Despite all the hype, blockchain is simply an online record-keeping system. Blockchain’s main function is to act as a ledger that tracks transactions between two parties. It can also serve to distribute transaction records (without identifying the parties) to any interested party that has access to the records. For example, in Bitcoin, blockchain is used to hold and share information about how many bitcoins are being transferred between two accounts. Without naming the two account holders, this information is made public to all interested parties via blockchain.

Blockchain’s potential

All the blockchain hype isn’t about what blockchain does. It’s about the underlying technology, the real backbone of blockchain. With blockchain technology, when a transaction is posted on the network between two parties, it is locked and chained to everyone’s ledger, making it extremely difficult for hackers to target. Furthermore, this innovative technology validates the accuracy and completeness of transactions posted almost instantly.

Now, by imagining a secure system that allows its users to rely on and place complete trust in each other, we can see how blockchain’s potential could be boundless! If two parties could enter into contracts, and complete and settle transactions between themselves via blockchain alone, it would ultimately eliminate the need for intermediaries. This would significantly impact a lot of industries, affecting financial institutions, lawyers, and accountants, among others. Take stock trading as an example. North American equity orders typically settle within two business days after the order is executed. By putting the proceeds of the trade and the trade securities on the trusted public ledger, blockchain could speed up this settlement process so that the securities could change ownership a lot faster.

How can blockchain impact the portfolio management industry?

Everybody is aware that blockchain is here to stay. Blockchain has proven potential to revolutionize many industries, but there are some issues needing worked out for it to be widely used.

At Croesus, we are embracing the idea of blockchain. We see so many potential uses for this technology in the portfolio management industry. In addition to speeding up trade settlement, blockchain could be used in various aspects of portfolio management, including compliance, asset allocation, and regulatory reporting. Of course, there is still a lot to learn and experiment with blockchain. We are quite excited about what the future holds and what Croesus will have to offer in the coming years.


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