Blockchain as a Backbone to Asset and Wealth Creation
Denis Thomas · 2018
Blockchain is primarily a ledger of all transactions that have been executed, which are stored cryptographically on a distributed database. In order to dive into the applications for blockchain within asset and wealth management, this chapter looks at typical asset and wealth management functions and shortcomings. It also looks at the current processes within a capital market, apart from the typical usage of bitcoin for bad versus good. The processes within the capital market include security issuance, position maintenance, clearing and settlement, asset servicing, and trading. The chapter explains the market challenges. They include multiple versions of truth, high settlement risk, manual processes, intermediaries, less transparency, limited audit trail, and long clearing and settlement cycle. Public and private security issuance can be managed via blockchain technology and physical documents can be fully digitized via smart securities.