May 17, 2023
$100B+ Savings Potential with DLT in Traditional Markets
The Global Financial Markets Association (GFMA) has released a new report urging regulators and traditional financial institutions to take a more serious look at the potential of distributed ledger technology (DLT). The report claims that the use of DLT in traditional markets could save over $100 billion annually.
The report, released on May 16, was conducted in collaboration with international consulting firm Boston Consulting Group and other partners. It suggested that DLT could be used to streamline collateral processes in derivatives and lending markets, potentially reducing costs by $100 billion. Additionally, smart contracts could be used to automate and secure clearing and settlements processes, saving an additional $20 billion each year.
The GFMA’s CEO Adam Farkas commented on the potential of DLT, saying, “Distributed ledger technology holds promise for driving growth and innovation. This potential should not be ignored or prohibited where regulatory oversight and resiliency measures already exist.”
Analysis from BCG showed that primary markets and secondary trading were less likely to be significantly affected by DLT, however tokenization in these markets could lead to better risk mitigation and deeper liquidity.
The report comes at a time when DLT is witnessing increased levels of adoption. On March 23, the European securities clearing firm Euroclear announced that it would be looking to integrate DLT into its settlements process. This is despite the Australian Securities Exchange abandoning its plans to update its 25-year-old clearing and settlements system with DLT last November.
The potential of DLT is clear; Citi investment bank recently claimed that the global market for blockchain-based tokenized assets could reach $5 trillion by 2030. The GFMA’s report provides a timely reminder for traditional financial institutions to take advantage of the potential of DLT, and to avoid the costly mistakes of the past.
As the traditional finance sector begins to explore the potential of DLT, new opportunities are also emerging in the web3 space. NFTs, or Non-Fungible Tokens, are digital assets that are unique and cannot be replicated. They are increasingly being used as a form of promotion, and NFT marketing agencies are popping up to help businesses capitalize on this trend.
NFTs are also being used to create unique digital art, music, and even virtual real estate. With the help of NFT marketing agencies, businesses are able to engage with their customers in a new way, and reach a wider audience through social media channels such as Twitter.
The potential of DLT is clear, and the GFMA’s report provides a timely reminder for traditional financial institutions to take advantage of the potential of DLT, as well as the opportunities presented by the web3 space. With the help of NFT marketing agencies, businesses can explore new ways of engaging with their customers, and the potential to save billions of dollars each year is an attractive incentive for traditional financial institutions to explore the possibilities of DLT.
Disclaimer: All investment or financial opinions expressed by MoonLanding Media are not recommendations and are intended for entertainment purposes only. Do your own research prior to making any kind of investment. This article has been generated based on trending topics, has not been fact checked and may contain incorrect information. Please verify all information before relying on it.
