Securities and (Derivatives?) Trading and Clearing in the Era of Blockchain: A Glass Half Full!

Avgouleas, E. (Invited speaker)

Activity: Academic talk or presentation typesInvited talk

Description

Harnessing the potential of blockchain technology is the next frontier in securities and derivatives trading and clearing and can prove transformative in several areas including management and warehousing of settlement risk, alleviation of systemic risk concentration, collateral reuse, the curbing of speculation, blockchain exchange organisation, and the structure of decision-making when universal consent is replaced by specified validators. Blockchain 2 technology that is used by platforms/systems like ethereum and Ripple has made the possibility of tokenised securities traded on blockchain technology platforms a reality. However, challenges remain in a number of areas including what happens in the event of trade failure, how tokens may be allocated via the system’s treasury, how trade priority is identified and safeguarded, and of course the omnipresent issue of regulation. These issues become even more challenging in the case of derivatives trading and settlement, trade verification, and margin calculation. Emilios Avgouleas argues that blockchain technology is not today advanced enough to answer these challenges and the future has not arrived yet. However, a number of platforms have started pushing the frontiers of technology and the possibility of blockchain securities and derivatives exchanges competing heads on with the present behemoths is not that remote whereas the benefits for the global marketplace in terms of competition, endogenous systemic risk management, and curbing of speculation are enormous.
Period3 May 2018
Held atAsian Institute of International Financial Law Faculty of Law, The University of Hong Kong
Degree of RecognitionInternational

Keywords

  • Fintech
  • blockchain
  • Artificial intelligence
  • Derivatives
  • Securities
  • Clearing and settlement
  • Blockchain governance