A DLT trading facility is a platform that uses distributed ledger technology for the trading of financial instruments. This refers to a regulated marketplace where securities or other assets are issued, traded, and recorded on a blockchain or similar distributed ledger. Such facilities aim to streamline post-trade processes, reduce settlement times, and enhance transparency by leveraging the immutable and verifiable nature of DLT. They represent an evolution from traditional exchange infrastructure, offering potential efficiencies and cost reductions.
Context
The state of DLT trading facilities is one of cautious yet growing adoption within established financial markets. A key debate centers on adapting existing regulatory frameworks, such as those governing market infrastructures, to the unique characteristics of distributed ledgers. Future developments will likely involve pilot programs expanding into full operational status, increased issuance of tokenized securities, and a broader integration of DLT into global financial ecosystems.
A FINMA-licensed DLT trading facility leverages blockchain and central bank integration to compress securities settlement from T+2 to 30 minutes, drastically improving capital efficiency.
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