What is Project Ion, and what does it mean for blockchain technology?
Trading stocks, bonds and derivatives requires an exchange of money, and systems to keep track of the transactions (millions of transactions!).
The DTCC (The Depository Trust & Clearing Corp) clears and settles transactions across a long list of investment products, totally over $2 QUADRILLION annually.
The process currently in place takes 2 days to complete. The steps start with confirmation of an order, and end with the exchange of funds finalizing the transaction.
Two days to settle is not ideal. There are risks that one of the steps could fall through, which means a failed transaction (opportunity cost as no exchange of value happened).
The velocity of money in this system is also slowed down by the wait time to complete a trade.
In addition, the delay means extra paperwork to keep track of the trades that are in the various stages of completion, and reconciliation of which settled, and which did not. This adds staffing costs to manage.
Project Ion is a blockchain (DLT) project tasked with reducing the time to settle transactions to same day. R3 is using their Corda Software and the $XDC token to settle transactions instantly.
When people look at the current marketcap of the crypto ecosystem, it pales in comparison to the traditional finance world of stocks, bonds and derivative products.
Once the infrastructure and security are in place to tokenize the ENTIRE world of capital markets across the globe, it will truly transform life as we know it.