Blockchain has now arrived at the commercialization stage after years of exploration and experimentation. It is one of the de-facto technologies that can transform the traditionally risk average and highly regulated capital markets. For example, the World Economic Forum published a report titled “Digital Assets, Distributed Ledger Technology, and the Future of Capital Markets” (1) that in great details outlines how blockchain DLT can positively impact capital market usecases in the equity markets, debit markets, derivates, and more.
Today’s enterprises' and financial services' operating models are highly centralized, where transactions between two parties (say buyer and seller of an asset, or producer and consumer of a service) need to pass through several intermediaries (middleman). Examples of these intermediaries include stock brokers, banks, clearing houses, exchanges, which add costs, delays, and even mistakes into transactions. Decentralization will remove the intermediaries, which in turn will lower costs, reduce errors, and speed up transaction, as well as offering new services not possible with traditional centralized services. In addition, decentralization will remove single points of failure, potential censorship/disruption/corruption by a single (nefarious) actor, and creating trust where all transactions are recorded, verified, and replicated. Blockchain can decentralized enterprise operating model by providing a single source of trusted truth, augmented with the power of smart contract.
(1) https://www.weforum.org/reports/338ea2d9-654a-45a0-a09b-7ca3cd8f248c
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