An Indian company has come up with a solution that could potentially change the way derivatives and cash contracts are settled in stock markets.
UTrade Solutions is a fintech company that provides enterprise solutions. They are also active in providing Blockchain driven learning, multi-asset trading platform, algorithms and risk management solutions to financial institutions and their end customers.
Recently the company has announced the launch of uClear, which is India’s first Blockchain solution for real time clearing and settlement of contracts in cash and derivatives segments.
What can uClear do?
uClear can allow exchanges to handle post execution trades using a private blockchain. We talked with Ashish Grover, CoCTO at UTrade Solutions, about the functioning of uClear.
Grover says to Cointelegraph :
“uClear is a Blockchain based clearing solution for real time clearing and settlement. It allows for any exchange-matching engine to clear trades post execution through a private Blockchain, across equities and futures, with real time risk management, reporting and other financial transfer instructions.”
Role of Blockchain in financial markets
uClear is built upon Multichain, which is a popular technology. While currently Blockchain adoption in the financial markets is at a nascent stage, the technology holds promise.
Harwinder Sidhu, CoCTO at UTrade, says regarding the role Blockchain could play in Indian markets:
“It's too early to say how Blockchain may be used in India. It's useful for smaller exchange segments clearing, any OTC trade finance type of transactions matching etc. It has huge potential to make financial markets more efficient, but the adoption is likely to take time.”
It is pertinent to mention that Blockchain is already being used in the financial markets in various roles. Nasdaq was the frontrunner when they deployed Nasdaq Linq in December 2015 and successfully recorded a private securities transaction.
Global Implications of uClear
While uClear may get adopted in India eventually, there are global implications of these developments as well.
uTrade plans to build more applications on Blockchain, which will address other financial services workflows both in India and the world. They are looking at KYC, trade financing and more.
According to a Press Release made by the UK based Global Markets Exchange Group (GMEX group), which is an exchange technology provider and operator of cost effective electronic exchanges across asset classes, they would be the first to integrate uClear during July 2016 through their GMEX technologies subsidiary.
India can find its niche in Fintech
The Fintech boom is finally reaching India and there is some buzz surrounding this space in the country.
India has acted as a back office to the world but with companies like uTrade coming up with developments, there maybe a chance for India to carve its own niche in this space.
The only requirements are a favourable regulatory framework, proper infrastructure and support from the state.