Bank of America has Adopted Blockchain Technology for Stock Brokering Aid
Bank of America is one of the biggest banks in the world. At present, the financial institute boasts about $1.08 trillion in AUM, with clients present in more than 30 countries. The beacon institute also referred to as BNY Mellon, became the talk of the crypto town when it announced an affiliation with blockchain service provider Paxos Settlement Service. The association with Paxos Settlement Service would allow the bank to settle the stock transactions on the same day.
This is a new step forward in blockchain technology adoption. It should be noted that it usually takes more than 24 hours for the international transfer of shares. In many cases, when the numbers of shares are in bulk, the transit could last for days. However, with the use of blockchain consensus technology, the value could be settled within 24 hours, and traders would be able to take advantage of conventional tools like stop loss more efficiently.
Swiss banks are known in the world for their privacy and accuracy. The Swiss banking giant Credit Suisse has already set a precedent for the rest of the monetary organizations by signing up for Paxos Settlement Services. The Paxos network operates a personalized and dedicated version of the Ethereum blockchain network.
The second bank to take advantage of this technology is Nomura Holdings, which is based in Japan. At present, only these three banks can provide their customers with lightning-fast stock transferring networks. This can prove to be a game-changer in the stockbroking industry. Bulk investors could have more flexibility to make their decisions, and they would also be able to manage their risks many times more efficiently.
Blockchain Technology will Improve Stock Trading Market
Chad Cascarilla, CEO at Paxos, remarked that the new technology would call out and replace the Depository Trust and Clearing Corp. (DTCC). This system is the closest technology that enables traders to have a same-day settlement. However, this network only works if transactions are punched in before 11:00 a.m., and it takes more or less two days at best.
Cascarilla also added that adoptions by names like BNY Mellon would make way for mainstream and widespread adoption of the technology. The Paxos network was approved by SEC in 2019, but it is getting traction in the present crypto boom environment. Kevin McCarthy, head of finance and clearing at BNY, told media that with the help of this technology, the service provider could determine the settlement cycle as minute as T+0, free overnight collateral posting, and better ROI for assets.