The use of Blockchain Technology is growing in banking and Bank of America has publicly joined in. Bloomberg reports that BOA has link up with the network created by Paxos Trust Co. to settle stock trades in minutes rather than days by using blockchain. As of today, Bank of America is the largest addition so far to the Paxos system. Presently, BOA’s use is limited to internal transactions pending regulatory approval.
Paxos is a regulated blockchain infrastructure platform, building a new, open financial system and creating custody solutions. Along with BOA, there are only two other banks that are testing the Paxos Settlement Service, which are Credit Suisse, and Nomura Holdings Inc.
Why Blockchain? Blockchain increases the processing speed of payment transactions. With the existence of Distributed Ledger Technology (DLT) it eliminates the need for intermediaries to authorize financial transactions between consumers. This offers a cheaper and easier way to exchange currency at lower rates.
Paxos CEO Chad Cascarilla claims that onboarding clients like Bank of America is important to push the technology’s mainstream adoption. He noted that,“The way we get mainstream adoption is by having firms like Bank of America come on and feel comfortable”. “This service allows two parties to settle equities trades in mere minutes instead of days”, he said.
