Bringing Bitcoin technology to the masses seems to be the primary objective for a lot of companies. uTrade, an Indian startup, will use blockchain technology for stock trade settlements. Instantaneous clearing and settlement of stock exchange trades is a significant benefit of blockchain technology in the world of finance.
The blockchain seems to quickly become a favorite tool among Indian startups. Albeit uTrade is specialized in selling trading platforms, algorithms, and data analytics, they too see the benefit of distributed ledgers. In fact, their new product will use this technology for instant settlement and clearing of stock exchange trades.
uTrade Brings Instant Settlements To Stock Trading
uClear, as this product is called, is built on blockchain technology. The company sees Bitcoin technology as a way to store and transmit data. Such a concept seems to be a perfect fit for the exchange and trading industry. Right now, it takes a minimum of two days to clear and settle exchange trades, which is far too long.
According to uTrade, their uClear product can clear these transactions immediately, by using distributed ledger technology. Several users share the common decentralized database, rather than putting one central authority in full control. A distributed approach will ensure there is always someone who can validate and clear transactions,regardless of business hours or day of the week.
uTrade Solutions CEO and co-founder Kunal Nandwani stated:
“Using blockchain, real-time, the two brokers inform the exchange of the trade, which can be validated, and immediately the transfer instructions go to the bank or the settlement depository. You can transfer the money and the stock. So, technically, this data is stored with the broker, the exchange, the depository, the clearing agents on a private blockchain; so everyone knows what trade has happened.”
But there is more to the uClear solution than just instant settlement of transactions. Due to the decentralized nature of the blockchain, multiple parties can individually verify transactions and reduce fraud rates to near zero. This has caught the attention of UK-based Global Markets Exchange Group, who will be the first to integrate uClear into its subsidiary GMEX Technologies.
This announcement comes at a time during which a lot of exchanges are actively exploring blockchain technology. Nasdaq, for example, is using their Linq platform to settle trades immediately. Similar trials are being conducted by Tallinn Stock Exchange and the Australian Securities Exchange.
Source: The Hindu Business Line
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