“At a time when the Post Office is losing substantial revenue from the instantaneous flow of information by email and on the Internet, slowing mail service is a recipe for disaster.”
— Bernie Sanders
A vibrant financial sector is fertile ground for strong economic foundation. Banking and finance institutions have often relied on archaic software to serve as the economic centrepoint of transactions, safekeeping of assets, with dire requirements for user identifications. Where the financial sector had been operating on status quo, it is now on the point of disruption.
Bob Greifeld, the Former CEO of Nasdaq, was quoted, “We currently settle at T+3. Why not settle in 5–10 minutes?”
Greifeld raised a valid question, given that in a world full of people with instant messaging with one another, settlement periods remain arduously long. The situation remains particularly surprising since financial institutions are widely perceived to be at the forefront of technological adoption.
The basis of trade lifecycles has remained nearly unchanged in over 500 years.
So What is an Ideal Economy?
As innovators are creating new ways to scale economic value, we envision an instantaneous economy coined the Stackonomics, achieving greater heights of capital access, liquidity and transparency.
1. Instant Trading Lifecycles
In a single day, fifteen million payment orders pass through the SWIFT network yet demand extra days for clearance and settlement.
If these were tapped onto the blockchain, the move to instant settlement and clearance would free up capital trapped in transit. A technological shift needs to be implemented for an instant economy towards the next-stage Stackonomics capitalism.
2. Instant KYC Eligibilities
Since the 2008 Financial crisis, worldwide regulations have compounded pressure for KYC/AML and strict compliance. According to a report on “2018 True Cost of AML Compliance”, the industry faces a hefty price tag of $25.3 billion a year.
Blockchain presents a practical answer to these challenges.
In a Stackonomics environment, governing restrictions can be coded onto smart contracts to minimise compliance risks and operational complications.
What does this mean?
In laymen terms, these smart contracts can be programmed to detect the validity of the user’s KYC documents to meet the requirements of a regulated financial ecosystem. So, imagine the KYC process to be instant, simplified, complex-free in a Stackonomics environment. More prominently, its in-built functions are designed to be completely compliant with regulatory standards.
“The efficiencies you can drive using the (blockchain) technology are as far-reaching as the Internet,” says Vic Pascucci, head of corporate development at USAA.
3. Instantly Auditable Records
The audit sector is widely known for midnight toil sessions.
The blockchain’s immutability and instant reconciliation dramatically assure records to be instantly verifiable and auditable. In a Stackonomics world, regulators will have the ability to retrieve such irrevocable historical data recorded onto the blockchain, rather than searching for potentially missing documents amongst the rows of cabinet-filled papers.
Imagine the level of speed and holistic integration with the immediacy of confirmations in trade cycles, audit, KYC sectors amongst others. The flow and exchange of goods, information, value goes up. The motion removes barriers and connects the whole ecosystem with pulsating speed.
How Is This Disruption Possible?
With a strong belief towards the blockchain-based momentum, a protocol has been developed to empower the financial institutions to issue, trade, clear and settle digital assets more efficiently.
Very aptly, it is termed Securities Trading Asset Classification Settlement (STACS).
The entirety of these industry-disrupting depictions is made possible through underlying smart contracts — clever programmable tools — based on a customisable set of rules to trigger execution. Built by Hashstacs, it envisions an interconnected financial world assembled securely on the blockchain through the STACS technology.