Bank of America to Settle Stock Trades on Paxos Network

Key Takeaways

  • Bank of America is set to join Paxos Network to settle stock trades.
  • The move will enable transaction settlements in minutes rather than days, Paxos says.
  • Bank of America is the latest of several major banks to adopt blockchain technology to improve its operations.

Bank of America, one of the world’s biggest banks, will start using blockchain technology via Paxos Network. 

Bank of America Joins Paxos 

Bank of America will join Paxos Network to settle stock trades, it was announced Monday. 

The move will allow Bank of America to settle trades in minutes by leveraging blockchain technology. Paxos uses its own version of Ethereum, which can offer significant improvements to the traditional banking system for trading, settling, and managing assets. In the equity markets, many stock trades are settled by the Depository Trust & Clearing Corp., which requires trades to be logged by 11:00 on the same day. It takes about two days to settle trades. With Paxos, the same trade can be executed in a fraction of the time. Using the Paxos Network also offers savings on costs. By settling trades faster, it allows for significant savings by freeing up collateral that would otherwise have to be provided. 

The Securities and Exchange Commission permitted Paxos to launch a pilot program for setting trades in 2019. Bank of America will join Credit Suisse Group AG and Nomura Holdings, Inc.’s Instinet to start using the technology. Kevin McCarthy, head of financing and clearing at Paxos, told Bloomberg that the second-biggest U.S. bank has been running internal transactions and will expand the service to clients if it gains approval as a clearing agency. 

Paxos was valued at $2.4 billion last month after PayPal, Credit Suisse Group AG, and others contributed to a $300 million funding round. The firm has quickly grown as major institutions start to acknowledge the efficiency improvements of using blockchain technology, but it’s not the only blockchain project that’s attracted institutions. Last month, the European Investment Bank revealed that it would issue €100 million (~$120M) worth of digital bonds on Ethereum. The sale was handled by Goldman Sachs, Banco Santander, and Société Générale.

Disclosure: At the time of writing, the author of this feature owned ETH, FLI, and several other cryptocurrencies. 

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Source: Read Full Article