Put equity lending onchain, or get out of the way

Equity markets currently operate on outdated systems that hinder efficiency and credibility, characterized by slow settlements and cumbersome processes. The author argues for a transition to onchain equity lending, which enables real-time settlements, programmable collateral, and clear rule enforcement. By utilizing onchain technology, the industry can significantly reduce risks associated with delayed trade executions and enhance transparency. Current equity lending practices are plagued by reactive risk management methods that often identify issues too late. Onchain systems would allow for proactive measures, ensuring only appropriately structured loans proceed. Regulatory measures, seen as supportive rather than obstructive, are being established to facilitate these advancements. There are still challenges, including fragmentation and privacy concerns, but these can be addressed through permissioned networks. The author contends that lingering with outdated methods will continue to compromise market trust and efficiency. As institutional demand grows and regulatory frameworks are developed, the call to shift equity lending onchain has become urgent: failure to adapt risks obsolescence in the rapidly evolving financial landscape.

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