Analysing blockchain/distributed ledger technology in capital markets and know your customer process

Abstract

Distributed ledger technology (DLT) is attracting the attention of the financial sector, both owing to its use in transactions with cryptoassets and to the proliferation of initiatives that have the potential to increase the efficiency, transparency, speed and resilience of processes underlying financial transactions, such as the know your customer (KYC) process. This paper aims to introduce this technology by describing a series of basic issues surrounding it and attempting to identify the possible value proposition in using this technology. Additionally, it addresses possible applications in the financial sector and outlines some of the main challenges to capital markets, where trust and collaboration are the key of success.