Blockchain Solutions for Institutional Capital Markets
Blockchain Solutions for Institutional Capital Markets
Blockchain technology is ushering in a new era of operational efficiency for capital markets. The ConsenSys product suite helps financial institutions adopt digital assets and capitalize on these transformative new solutions for the financial industry.
Issue digital securities in minutes
The Problem
Security issuance today is a complex, time-consuming process that involves multiple stakeholders—the issuer, investment bankers, syndicate members, regulators—who all need to reconcile on an array of documents: engagement letters, issuer undertakings, regulatory submissions. This manual, multi-step process is both inefficient and prone to errors.
The Solution
Our blockchain application suite, ConsenSys Codefi, enables you to easily and quickly create digital representations of conventional securities using Ethereum’s built-in token functionality. Blockchain-based securitization not only streamlines issuance by digitizing documents but also allows you to customize financial instruments and create wholly new digital assets.
See how Mata Capital partnered with ConsenSys Codefi to tokenize €350M of real estate→
Conduct sales and trading on a common, transparent platform
The Problem
Sales and trading today is fragmented across exchanges, brokers, and order matching systems, often with time delays up to 10 business days and therefore increased counterparty risk. Multiple copies of each transaction pass through intermediaries such as clearing banks and depositories, resulting in billions of dollars of back office costs and custodial services.
The Solution
Blockchain solutions enable digital securities to seamlessly go to market through a variety of automated mechanisms such as bilateral negotiations, centralized exchanges, decentralized exchanges, matching algorithms, and auctions. By implementing decentralized marketplaces, the Codefi suite helps counterparties coordinate on a shared platform and trust an authoritative data source for transactions.
Manage assets in a single dashboard
The Problem
Collateral management today involves manual reconciliation and the physical delivery of securities, causing delays of up to two days between the valuation and call. Moreover, collateral valuations, implementation of agreements, and the view of positions are inconsistent across participants, making it difficult to obtain a full overview of a firm’s existing collateral.
The Solution
Codefi provides a view of all margin calls and pledges in a single dashboard so you can analyze collateral balances in real time. This unified snapshot allows asset managers to accurately calculate and rebalance collateral across a trading network and provides investors with a comprehensive wallet view of all their assets.
Streamline exchange infrastructure
The Problem
Exchanges are responsible for a complex array of tasks ranging from the trading and management of equities to OTC upgrades to data licensing. Many of these processes, such as KYC, AML compliance, and trade matching—though increasingly electronic—have latency problems and technical constraints that result in costly overhead.
The Solution
Codefi’s technology facilitates fair and orderly trading and efficient price discovery, while accommodating new digital asset classes and ensuring security and compliance. With Codefi, securities exchanges can streamline data verification, expedite clearing and settlement, and embed payments networks, ultimately decreasing overhead costs.
Achieve instant settlement and unparalleled accounting
The Problem
The clearing and settlement process today is built upon fragmented financial infrastructure that is not only inefficient but results in significant liquidity constraints and credit risks. The settlement cycle on current financial systems can take up to 10 days, leaving both counterparties exposed to the risk of not receiving the securities or purchase price on time.
The Solution
Codefi’s smart contract technology enables asset settlement and ledger consolidation in seconds instead of days. As a blockchain-based platform, Codefi offers a single source of truth so you can see an asset’s journey from one custodian to the next, with every debit and credit recorded as an immutable entry.
Launch your blockchain solution for capital markets with ConsenSys.
Benefits of Blockchain in Capital Markets
Faster Access to Capital
Programmable assets and securities mean new securities can be issued in minutes, with rights and obligations encoded, so you can increase the velocity of funding events.
Increased Solvency
Blockchain-based digital assets allow for the fractionalization of previously illiquid assets, lowering the barriers to entry for both issuers and investors.
New Financial Instruments
Blockchain technology has enabled the creation of entirely novel asset classes for capital allocation, with programmable standards to ensure adoption and compliance.
Transparent, Real-Time Data
A blockchain’s distributed ledger technology streamlines KYC and AML processes and allows investors, regulators, and other market participants to analyze market activity in real-time.
Reduced Counterparty Risk
Instant and transparent clearing and settlement reduces default and systemic and ensures both ends of a counterparty receive their securities and purchase price in T+0 days.
Lower Operational Costs
Reduced transaction costs and simplified fund servicing, accounting, allocation, and administration will decrease overhead and resulting fees across capital markets.
Explore Blockchain Solutions for Syndicated Loans
Find out how blockchain technology is bringing standardized, digital solutions to the complex syndicated loans market.
Major Financial Clearinghouse Is Exploring Ethereum for Digital Asset Management
The Depository Trust & Clearing Corporation’s new prototype leverages the Ethereum blockchain to streamline capital markets activity.
Capital Markets Case Studies
Mata Capital: Real Estate Investment With Blockchain Technology
French investment fund Mata Capital partnered with ConsenSys Codefi to tokenize three funds worth a combined total of €350M.
August Debouzy: Joint Security Token Offering Services
Law firm August Debouzy worked with ConsenSys to offer asset managers, investors, distributors, and enterprises a joint Security Token Offering (STO) service.
Project Ubin: A Distributed Ledger Technology Initiative in Singapore
In a consortium effort, the Monetary Authority of Singapore partnered with ConsenSys and several financial institutions to explore the benefits of blockchain for capital markets infrastructure.
Capital Markets Insight Reports
Advancing Capital Markets
How Ethereum is fixing broken processes in our financial system, such as settlement, KYC/AML, custody, and data security.
The Future of Asset Servicing
Discover the emerging trends in the asset servicing industry and the strategies that early innovators are taking to capitalize on blockchain technology.
The Digital Asset Manager
A deep dive into blockchain solutions for the European funds industry, focusing on the Custodian Bank, the Fund Administrator, and the Transfer Agent and Reporting.
ConsenSys Codefi
The Blockchain Application Suite for Capital Markets
Codefi offers issuers, fund managers, exchanges, investors, and regulators a complete blockchain application suite for capital markets activity, from issuing and managing the lifecycle of digital assets to trading tokenized securities and ensuring security and regulation compliance.
- Create financial products that are not currently securitized, including accounts payable, invoices, and supplier service contracts. Build on the connectivity between fully digitized assets to form new financial products and services.
- Better meet investor and market demands by restructuring slow settling financial products and customizing asset issuance directly for investor specifications.
- Unlock liquidity by enabling fast and secure peer-to-peer asset transfers to expand secondary market opportunities and attract further investors to your network.
- Access global markets, broaden your investor base, and amass more diversified assets under management with international distribution capabilities.
- Achieve optimal operational efficiency and reduce costs with automated processes, and a distributed and mutualized market infrastructure.