Blockchain startups have emerged that challenge the securities trading system monopolized by the U.S. Central Depository Agency (DTCC).
According to the Wall Street Journal (WSJ) on Nov 7, the US Securities and Exchange Commission (SEC) authorized a blockchain startup Paxos' securities transaction settlement service pilot project on the 28th of last month. Paxos intends to build a fast and low cost way to deal with stock trading with blockchain technology.
The average time to settle a stock trade in the US is two days. Because of this, investors have to wait a few days to receive cash from brokers when selling stocks. The company's pilot project is to shorten this period with blockchain technology. In other words, the aim is to have the transaction closed on the same day. The pilot project is scheduled to begin later this year.
It can handle only 140 trades that are actively trading, such as Exxon Mobil Corporation or Bank of America Corporation. The number of transactions Paxos can settle is also limited to 1% of the average daily trading volume.
WSJ says that the pilot project of Paxos is "only a small part of the US securities market and there is no guarantee that it will succeed." Expected.