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Private blockchains handle over $1.5 trillion in securities financing per month

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Private blockchains have emerged as a dominant force in the global securities financing market, handle over $1.5 trillion in transactions every month. This staggering figure highlights the significant, yet often overlooked, role that private blockchain networks play in the financial sector. By enabling secure, efficient and transparent transaction processes, these blockchains are revolutionizing the way securities financing transactions are conducted globally.

The adoption of private blockchains in the securities market is driven by their ability to provide greater privacy and control over transaction data, which is critical for financial institutions. Unlike public blockchains, private networks offer limited access, ensuring that only authorized participants can view and verify transactions. This feature is particularly interesting for managing large volumes of sensitive financial transactions, as it mitigates the risk of data breaches and unauthorized access.

Additionally, private blockchains facilitate real-time settlement of transactions, reducing traditional delays associated with clearing and settlement processes. This capability not only increases operational efficiency but also significantly reduces the costs associated with securities financing. Financial institutions can streamline their workflows, improve liquidity management, and increase overall market stability through the use of these advanced blockchain technologies.

JP Morgan reportedly trials up to $2 billion in transactions per day on its Onyx blockchain, which allows its customers to “settle billions of dollars’ worth of repo transactions in minutes, using smart contracts to tokenize and provide cash and collateral on a single ledger” , Nikhil Sharma, head of growth at Onyx Digital Assets, said

Broadridge Distributed Ledger Repo (Light of Dynamics) platform handles $50 billion in repo volume per day and is used by companies such as Societe Generale, UBS, HSBC and Chicago-based trading giant DRW.

Last month, Broadridge’s DLR, built using Cantonal Protocol, a smart-contract ledger created by Digital Asset, has become interoperable with JPMorgan’s JPM Coin, which also runs on a privacy-focused fork of Ethereum. DLR is also used by Commerzbank, with other banks to be named soon.

As the financial sector continues to evolve, the role of private blockchains is expected to expand further. Innovations in blockchain technology, coupled with growing regulatory support, will likely drive more widespread adoption of private networks for various financial applications. This trend indicates a shift towards a more decentralized and efficient financial ecosystem, where private blockchains serve as the backbone for secure and scalable financial operations.



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