An Intrinsic Review on Securitization using Blockchain

Abstract

This paper presents a blockchain-based Securitization Model, which simplifies the transactional methods. This paper elaborates upon integrating the components of Securitization with Distributed Ledger Technology (DTL) and provides a process flow of transactions occurring. The process which once led to the 2008 Financial Crisis has been improved in terms of security and reliability. Using this revolutionizing model, securities, which were once considered opaque & risky, will now be informative and gauged accordingly, thereby smoothening the process of transforming non-tradable assets into tradable securities. This paper highlights how blockchain features, i.e., smart contracts, decentralization, authentication & immutability, will increase efficiency. Furthermore, the paper explores boons of the amalgamation, i.e., reduced risk, enhanced transparency, lower costs, proficient processes and robust authentication without compromising information asymmetry, high transactional costs and nebulous portfolio rating. The goal of this paper is to portray how the integration will augment the cardinal Securitization process.