Blockchain technology has undoubtedly more fans than the crypto industry. Bank of America seemed to be the latest one to join the fan club with its recent revelation.
The blockchain industry has garnered immense traction, particularly over the last few years as digitalization emerged at full speed. The covid-19 pandemic further spruced up the process. Now, blockchain tech has been used in several industries all across the globe. Bank of America announced that it had joined hands with the Paxos Settlement Service in order to allow its customers to carry out stock settlements almost instantly or within minutes.
Bank of America eyes same-day stock settlements
Launched in 2019, the Paxos Settlement Service allows users to settle their stock trades within the same day without having to wait for too many days. Bank of America revealed that it would use this service to render its users with the opportunity to execute same-day settlements of stock trades.
The bank has reportedly been conducting internal transactions over the last couple of months to test the ability of the service that Paxos offers. While this proved to be successful, the head of financing and clearing of the bank, Kevin McCarthy told Bloomberg that the clients of the bank would soon be able to use this service as it awaits approval.
Elaborating on the same, McCarthy said,
“We can determine the settlement cycle down to T+0,. We then can free up the collateral we’d have to post on an overnight basis,” ‘which could lead to big savings.’ “The return-on-assets in this business would improve, which has been a challenge.”
The addition of this service would lure in more clients to the bank and aid in more flexible and faster settlements. The bank was reportedly employing services provided by the Depository Trust & Clearing Corporation [DTCC]. However, the stocks took about two days for settlement. Addressing the same, the chief executive officer of Paxos, Chad Cascarilla said,
“That flexibility and change in workflows to bilateral settlement is very interesting.”