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Blockchain and its application in capital markets

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Fixed income origination is perhaps one of the areas of investment banking that has been the least digitized in recent years. Originating a new bond still continues to involve highly manual processes, both on the part of the issuer as well as on the placement banks. Blockchain technology would allow some of these processes to become more efficient. This may eventually happen as long as most investment banks assume this new technological standard and the regulation across different jurisdictions is homogeneous and clear. However, this process will take some time to materialize.

Which processes can the Blockchain technology contribute to the most at the present time? If we take into account the different phases of a bond issuance, we can distinguish between pre-trade, trade and post-trade (the bond settlement). The pre-trade requires preparing the bond documentation as well as probing investors’ interest in order to recommend to the issuer the…

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