The Use of Blockchain in Clearing and Settlement

Abstract

The aim of this paper is to prove that the Blockchain technology could be used to streamline transaction lifecycle, especially the clearing phase. The hypothesis made is that the potential changes induced by this disruptive technology are huge, but that a huge change in the process will not necessarily result in a change when it comes the landscape of financial services firms. Indeed, the test conducted emphasize on the fact that the investments needed can only be supported by current established firms, whether they are already in the clearing industry or in other parts of the financial markets. To that end, three examples of ongoing blockchain implementation are detailed and possible extrapolation is provided. The results are in line with the initial statement: each project is sponsored by a current major actor in the financial services business. Small Fintech firms have a role to play, but mainly as a junior partner, specialized in one aspect of the bigger picture which is reshaping the clearing and settlement industry.