The bank is the next big financial institution that takes a close eye on Bitcoin and particularly Blockchain. Bank of America (BoA) tries to integrate Blockchain technology for stock clearing. This will help the companies to settle the transactions in real-time and will reduce the risk for the highly volatile shares. This February similar problem forced Robinhood and other brokerages to stop trading stocks like Gamestop for a few days.

Yesterday the bank announced that it will use Paxos blockchain to settle internal stock trades. If the institution receives regulatory approval, it plans to offer the service to its clients.

Bank of America is the second bank in the USA and the third big bank to interact with Paxos for stocks. Paxos is a US-based company for blockchain infrastructure. The business helps PayPal’s crypto exchange. In addition, last month European banking giant Credit Suisse started using its products.

The move of BoA is significant for the financial industry. Blockchain technology promises to reduce the time of stock settlement from a few days to a few minutes.

Currently, the stocks are settled by 50-year-old institution Depository Trust & Clearing Corp (DTCC). The company uses “T+2”, a settlement process via legacy software. It makes it 2 days to settle the transactions and finish the operation.

Before a few months, DTCC had a problem settling Gamestop’s shares and it asked Robinhood and other brokerages to stop the trading of the share. The reason was that the lag in the clearing process made it hard for the system to settle all the transactions.

The incident led Robinhood’s CEO to publish a blog post calling for “T+2 to go” and for real-time settlement which the Blockchain technology can provide.

For now, the DTCC is not going anywhere mostly because the stock settlement and clearing is a highly regulated field. Any change will require approval of the SEC or Congress.

Want to learn how passive income will take care of your future:

New cryptocurrency passive income investments platform. Without deposit locking, deposit in 15 different cryptocurrencies, earn in crypto.

Registration link: https://tradinginsight.ai/?partner=cryptocurrencytimes

Basic support videos for Tradinginsight

Link for our Telegram channel, where you will find answers to your questions: https://t.me/Cryptocurrency_Times

 

What's your reaction?
Happy0
Lol0
Wow0
Wtf0
Sad0
Angry0
Rip0
Leave a Comment