May 17, 2023
“DLT Could Save Global Markets $120 Billion Annually”
The global financial markets could save up to $100 billion a year, potentially more, if distributed ledger technology (DLT) was adopted, according to a new report by the Global Financial Markets Association (GFMA).
The traditional finance sector lobby group, along with international consulting firm Boston Consulting Group and others, has urged regulators and traditional financial institutions to consider the benefits of DLT in a May 16 report.
Distributed ledger technology is an umbrella term for a system that records transactions and digital information. A blockchain is a specific type of distributed ledger.
“Distributed ledger technology has the potential to drive growth and innovation,” said GFMA CEO Adam Farkas. “This should not be disregarded or prohibited where there are already regulatory oversight and resiliency measures in place.”
The report suggested that using DLT to streamline collateral processes in the derivatives and lending markets could save an additional $100 billion, while smart contracts could reduce overheads by $20 billion each year.
Clearing and settlements seemed to be the areas that would benefit most from implementing DLT, followed by custody and asset servicing. Primary markets and secondary trading were less likely to witness significant changes, however tokenization in these markets could provide better risk mitigation and deeper liquidity.
DLT is beginning to gain traction internationally. On March 23, the European securities clearing firm Euroclear — which has over 37.6 trillion euros ($40.9 trillion) in custodied assets — announced that it would be looking to integrate DLT into its settlements process.
Despite this, there is still a need for improvement when it comes to implementing DLT into existing financial systems. Last November, the Australian Securities Exchange abandoned its plans to update its 25-year-old clearing and settlements system with DLT, resulting in a $170 million loss.
The GMFA report comes shortly after Citi investment bank predicted that the global market for blockchain-based tokenized assets could reach $5 trillion by 2030.
As the world moves closer to the adoption of DLT, the question of how to best utilize the technology arises. The GMFA report provides a useful insight into the potential savings that could be achieved by integrating DLT into traditional financial markets.
NFTs, or non-fungible tokens, are a type of blockchain-based asset that have become increasingly popular over the past year. As more people look to buy and sell NFTs, the need for efficient and secure NFT marketing, promotion, and sales strategies is becoming increasingly important.
NFT marketing agencies are springing up to help with the promotion and sale of NFTs, offering services such as Twitter NFT marketing, NFT promotion, and NFT sales. Web3 agencies are also being established to provide support and guidance to those looking to sell NFTs.
As the use of DLT continues to grow, it is likely that more businesses and individuals will look to benefit from the potential savings and efficiency gains that the technology offers. It is essential that regulators, traditional financial institutions, and other stakeholders continue to work together to ensure that DLT is implemented safely and effectively.
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.
