The Blockchain Revolution: Disrupting Derivative Markets with Smart Contracts

• Main Authors: Jaiwani, Megha, Gopalkrishnan, Santosh, Kale, Vinita, Chatterjee, Anish, Khatwani, Ritesh, Kasam, Nihal, Kumar Mitra, Pradip
• Format: Conference Proceeding
• Language: English
• Subjects: Automation; Blockchain technology; Blockchains; Business; Collaboration; Derivatives; Finance; Regulators; Security; Smart contracts; Technological innovation
• ISSN: 2159-5119
• DOI: 10.1109/ICTMOD59086.2023.10438145

The derivative trading market is a critical component of the global financial system, and its efficiency and fairness directly affect market participants. The adoption of blockchain and smart contracts in this domain has the potential to revolutionise the way derivatives are traded, benefiting both businesses and investors. This research paper explores blockchain technology's and smart contracts' potential transformative impact on the derivative trading market. It aims to investigate how these technologies can enhance transparency, efficiency, and security while reducing fraud and errors in derivative trading. The study employs a literature review and analysis of current trends and developments in blockchain and smart contract technology. It also considers case studies and pilot projects in the financial industry to understand the practical implications. The research reveals that while the adoption of blockchain and smart contracts in the derivative trading market is in its early stages, there is a growing interest among businesses and investors. As the technology matures, it is likely to play an increasingly crucial role in enhancing the fairness and accessibility of derivative trading. The findings suggest that integrating blockchain and smart contracts in derivative trading can reshape the industry by improving transparency, efficiency, and security. Market participants and regulators should closely monitor these developments to ensure a fair and competitive marketplace. Additionally, businesses should consider the cost-saving opportunities and strategic advantages of adopting these technologies in their derivative trading operations.