In What Ways Can a Consortium Blockchain Be Used to Manage Risk in Financial Derivatives Markets?

A consortium blockchain provides a shared, real-time view of transactions and exposures to all permissioned members, enhancing transparency in derivatives markets. This shared ledger can be used to monitor counterparty risk by tracking the obligations and collateral of each participant.

Smart contracts can automate margin calls and collateral management, reducing settlement risk and ensuring contractual obligations are met promptly. The immutability of the ledger provides a verifiable audit trail, which aids in regulatory compliance and dispute resolution.