Nasdaq wants to use blockchain technology to quickly resolve margin calls.
The stock exchange operator said its clearing arm, along with securities services provider ABN AMRO Clearing and financial services firms EuroCCP and Euroclear, have developed a joint proof-of-concept (PoC) blockchain platform to transfer collateral to central counterparties.
According to a press release, the platform covers margin calls through a distributed network among collateral givers, takers and intermediaries. A margin call is a demand by a broker that an investor deposit more cash or securities to cover possible losses.
The PoC will allow market participants “to handle the margin call, the securities collateral delivery and the return process within minutes,” the press release claims. Read more here.