Blockchain-based Financial Instruments: Business Applications

This study is devoted to security trading on a stock market and prospects of blockchain technology in application to financial instruments. Since the essence of financial transactions requires high security and reconciliation of different internal ledgers, empowering transition from traditional trading platform to blockchain-based is of high relevance. The general purpose of the study is to consider possibility of stock trading based on blockchain architecture and assess the feasibility of transition to digital securities trading. In the first part of the study literature that reflects research problem is reviewed. Current stock market state, its prevailing trends and problems are described. Attitude of the international community and governments to blockchain-based systems is considered. The second part examines current trading processes on a stock market. Trading on organized and non-organized stock market is described. Processes that may be transferred to blockchain are defined. Risks and challenges associated with transition from traditional system to blockchain are taken into account. In the third part trading process models AS-IS and TO-BE are developed in ARIS notation via ARIS Toolset. This part also states advantages of blockchain-based trading compared to traditional. The conclusion highlights feasibility of shifting trading processes to blockchain despite its risks and challenges. Recommendations to blockchain implementation on the stock market are given. As a result, current research proclaims that international trading inefficiency, excess fees and certain restrictions can be overcome by blockchain distributed ledger implementation. Conducted business processes reengineering can be useful to design a blockchain-based trading platform. The study consists of 65 pages, including 30 figures and the list of 42 references.