How Does a Permissioned Blockchain Improve Settlement Speed for Derivatives?

Settlement speed is improved because the network has a smaller, known group of validators, eliminating the need for extensive consensus mechanisms like Proof-of-Work. This streamlined process allows transactions, such as those involving over-the-counter derivatives, to be confirmed nearly instantly.

The reduced number of nodes minimizes latency and increases transaction throughput. This efficiency lowers counterparty risk and operational costs.

Fast settlement is key for managing collateral in volatile markets.