The Blockchain: Capital Markets Use Cases

GreySpark Partners presents a report, The Blockchain: Capital Markets Use Cases, examining how investment banks and other financial markets firms could potentially utilise distributed ledger technology (DLT) in the future. The report characterises a wide variety of different forms of blockchain applications being developed by fintech start-up companies globally, and it discusses how those applications could eventually be used by capital markets participants as a means of replacing existing front- and back-office systems and processes within the buyside and the sellside.

For More Information Please: Contact the Authors

Despite the fact that the blockchain was initially developed as a freely-accessible, utility-like alternative to traditional means of recording and storing the transfer of assets between counterparties within a distributed, shared network, many fintech start-ups are focused on developing private blockchains in 2015 that can only be accessed by pre-approved participants. GreySpark believes this trend shows a disconnect between the business imperatives of fintech start-ups to create blockchain solutions that garner widespread uptake and the desire of banks and buyside firms to support a DLT solution designed to service every aspect of the pre- and post-trade lifecycle.

This report defines DLT and the blockchain protocol, and it analyses how banks and exchange platform operators are testing their use within both proprietary environments and on a consortium basis. The report also analyses the potential for a raft of blockchain applications developed by fintech start-ups that could expand the functionality of those solutions within the capital markets industry in the future. These solutions aim to bridge the gap between distributed ledger systems and the world of mainstream financial infrastructure.

The Blockchain: Capital Markets Use Cases – Table of Contents

  • 1. Unmasking Bitcoin
    • 1.1. The Anarchic World of Cryptocurrencies
    • 1.2. The Blockchain
    • 1.3. Smart Contracts
  • 2. Applying the Blockchain to Financial Markets
    • 2.1. Payments and Remittance
    • 2.2. Issuance, Ownership and Transfer of Financial Instruments
    • 2.3. Servicing of Instruments
    • 2.4. Clearing and Settlement Latency
    • 2.5. Reconciliation
    • 2.6. Know-your-client and Anti-money Laundering Registries
    • 2.7. Regulatory Reporting
  • 3. Banks and Other Financial Services Firms Usage of the Blockchain
  • 4. Blockchain-focused Fintech Initiatives
  • 5. Overcoming Inertia
  • 6. Appendices
    • 6.1. Glossary of Terms
    • 6.2. Table of Figures
    • 6.3. Methodology