Definition ∞ Repo settlement is the process of completing a repurchase agreement (repo) transaction, where securities are sold with an agreement to repurchase them at a later date. In traditional finance, this involves the transfer of collateral and cash between parties. The application of blockchain technology seeks to streamline and accelerate repo settlement, potentially reducing counterparty risk and operational costs.
Context ∞ The modernization of repo settlement using blockchain technology is an area of active exploration within financial institutions. Digital asset platforms are developing solutions to enable near-instantaneous settlement of collateralized transactions. This innovation holds the potential to significantly improve liquidity and efficiency in wholesale funding markets.
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