“Financial institutions that deploy Paxos’ post-trade solutions see an average 300 per cent return on investment (ROI) within two years,” according to blockchain infrastructure company, Paxos.
The company found that this was due to “enhanced back-office efficiency”.
Paxos’ services enable firms to automate the management of their precious metals post-trade lifecycle, with Paxos’ platform offering multilateral payment netting and simultaneous settlement for the unallocated, over-the-counter precious metals market.
The company found that historic and live precious metal trade data indicates that companies that engage with its post-trade and settlement solutions can reduce obligations by an average of 80 per cent, while achieving cost savings equivalent to five basis points of their annual settlement obligations.
This is similar to figures generated by continuous linked settlement in foreign exchange markets.
Additionally, fast-evolving industry regulations, such as the US Securities and Exchange Commission’s determination to reduce the securities settlement period from T+2 to T+1, are dominating resource focus and squeezing company balance sheets.
The budgets of many firms have subsequently come under increasing scrutiny over recent months, with funding for strategic projects typically subject to robust ROI requirements, finds Paxos.
Anousha Rayner, head of commodities growth at Paxos, comments: “The commodities market has lagged the likes of equities in terms of settlement infrastructure and efficiency for far too long – but the tides are now turning.
“Our solution is also helping to future-proof users against rapidly shifting regulations around settlement, such as the move to T+1 settlement in the US, with Paxos’ technology permitting clients to settle precious metal trades within a day.”
