The future of the capital markets industry

 The future of the capital markets industry is in sight. As seen above in the title, this article will discuss how blockchain technology is going to revolutionise the industry, what industries it will affect and some of its implications.

First of all, looking into how blockchain technology works with capital markets requires a look at existing financial market infrastructure. This includes trading venues for equities, government bonds and currencies as well as repositories where information on these assets are stored and central securities depositories where securities are held. Another component of the market infrastructure is trade reporting, which involves providing data to regulated third-party service providers that use consolidated feeds to report prices and trade volume across various exchanges.

Blockchain technology has been called 'transformative' by Jamie Dimon , who confirms that it is already having a disruptive effect on the banking sector, which he says 'isn't going away'.

Blockchain technology makes it possible to transfer value between two parties without requiring any of those parties be required to trust one another. This means that assets can be transferred directly between two parties, removing traditional intermediaries who are required for asset transfers. Effectively, this revolutionises how capital markets work as they currently operate because of these intermediaries - by removing them the costs associated with the process are reduced considerably . The cost reduction will have significant effects on various areas of finance , particularly investment banks and prime brokers who benefit from increased trading volumes through access to better pricing, lower fees and faster execution times . It will also allow market participants to 'trade' assets directly with one another, bypassing the need for brokers. An example of this direct trading is seen in Nasdaq's Linq , which uses blockchain technology to facilitate share trading between pre-IPO companies and their private investors .

The potential implications of this are enormous - not only will it reduce costs through reducing intermediary fees, but market participants will no longer be restricted by traditional jurisdictions . This allows capital markets to transcend international barriers that currently exist due to regulatory requirements that focus on where the issuer or investor is based. Blockchain technology therefore has global implications because all transactions can occur simultaneously, irrespective of jurisdiction .