How Can a Consortium Blockchain Improve the Transparency of Collateral Management for Derivatives?

A consortium blockchain can significantly improve the transparency of collateral management for derivatives by creating a single, shared, and real-time ledger of all collateral postings and movements. All permissioned participants can see the current status of collateral, reducing disputes and information asymmetries.

Smart contracts can automate the valuation of collateral and trigger margin calls when thresholds are breached, ensuring that collateral requirements are met in a timely and transparent manner. This provides a clear and auditable trail of all collateral-related activities.