Digital Asset recently hosted a webinar with Broadridge Financial Solutions to discuss how distributed ledger repo (“DLR”) is transforming the APAC market and its impact on balance sheets in capital markets. The panel featured Kelly Matheison, Chief Client Experience Officer, Digital Asset; Horacio Barakat, Head of Digital Innovation for Capital Markets, Broadridge; Rajeev Tummala, Director Digital, Data & Innovation, HSBC Securities Services; and moderator Jamie DiBiasio, Editor and Founder, DigFin.
Repo trade today is a $1T market with products featuring different settlement cycles, ranging from only a few hours to overnight settlement with multiple parties involved. The discussion opened with the benefits of adopting DLR to digitize workflows and utilize smart contracts to manage multi-lateral processes. This allows for real-time settlement and creates a single source of truth for all parties to interact with each other. DLR optimizes financial transactions and syncs balance sheets, allowing institutions to accurately spot idle collateral and cash and deploy them effectively.
The panel discussed how most participants involved in repo already have an efficient operation process internally, but emphasized that it’s usually not possible to further optimize existing processes within a short timeframe. DLR can help to standardize how parties interact with each other; when all parties are within a single network, standardization can bring efficiency in data exchange within a pre-agreed framework. The result is lower risk, a reduction in operating cost, encouragement of more trade, as participants are fully aware of their financial positions and no longer be hampered by tedious processes. Participants can also utilize existing infrastructure, such as the Broadridge network, rather than building from the ground up.
Finally, the webinar touched on Repo opportunities in Asia, where there is substantial cross-border activity. DLR can help make Asian assets more accessible, facilitate implementation of smart contracts, and allow for better risk management with executions made only when compliance requirements are met. This allows for technology to harmonize with variances in regulations and reduces compliance risks, while conforming to data sovereignty laws in the region.
To learn more on the benefits of lifecycle management with smart contracts and how DLR can manage balance sheets across time zones efficiently, click the link below to watch the webinar recording.
