Wall Street Meets Blockchain: Clash of the Giants
Once only an eight-block street in Manhattan, Wall Street has since grown to be synonymous with the US financial markets and services as a whole. This is a gigantic establishment, unquestionably claiming its place as the home of the business and especially financial elite.
However, there are still underlying — and very serious — problems that plague Wall Street that could be solved with blockchain.
In the digital age, it’s strange to think that Wall Street still uses some of the same policies that were created at its beginning. In particular, the policies that the Depository Trust & Clearing Corporation (DTCC — the actual owner of records for most stocks traded in the US) is guilty of, being relics from a time before the internet and the technology available today.
One outdated policy that’s particularly troubling regards the ‘chill’ period that is instilled when a public company chooses to go private. Trades can still happen, but they are ignored and undocumented by the DTCC.
It’s outdated rules such as these that make it possible for companies to oversell stocks that they don’t even have. Dole, for example, found out that they had 12 million shares unaccounted for — something only brought to light during a class action lawsuit. Dole wasn’t even aware that these shares existed.
With a blockchain-based platform, it would be impossible for a situation like this. Every share would be accounted for, even when they are sold and traded. The Blockchain could reveal any shady practices a company may be trying to hide using privacy as the excuse.
With the way Wall Street operates today, there’s plenty of room for improvement. The question is: what will revolutionize the way stocks are handled? One thing that’s guaranteed to do just that is blockchain technology.
The Blockchain’s digital ledger system would legitimize all trades on Wall Street. The very core of blockchain technology requires public records, controlled by a network rather than any single person. Every time a stock is sold, ownership is instantly transferred to the new owner and the information of every person, or business, that has controlled a given stock is kept within the blockchain. The information cannot be altered or falsified.
Another aspect of the blockchain is that it removes the necessity of an intermediary, such as the DTCC, to validate or move goods from person to person. That will save time and money since there will be no extra fees with a middleman. The blockchain can keep track of all that information and complete the transaction immediately with the help of a Smart Contract once all of the obligations of that contract have been met.
Even with Wall Street known around the world as a corporate giant, there’s no denying that there’s room to grow. Or, that blockchain will change everything about how the world works. Especially financially.
Companies like Etherecash are working hard to implement their own blockchain-based platform, backed by cryptography which significantly improves transparency, security, and reliability using Smart Contracts. They aim to “help bridge the gap between those with access to finance and those without, eliminating borders, intermediaries, and prejudices.”
Purchase our Etherecash token through our ICO from November 15th 2017. Developed on the ERC20 blockchain technology with lawyer backed contracts, to make blockchain backed lending and fund management, private and seamless.
Buy our tokens now. Visit Etherecash.io.