Skip to main content
SpringerLink
Log in

Reducing stock market settlement days using blockchain

  • Published:
Multimedia Tools and Applications Aims and scope Submit manuscript

Abstract

The current Indian stock market structure is fully centralized, with each party's government, financial institutions, and private sector relying on one another to authenticate transactions. Because of the prior party's reliance, the settlement in client Demat accounts takes T + 2. Most of the time, the T + 2 rule causes retail short-term investors or traders to lose money or fail to make a profit. The current settlement method is extremely difficult to comprehend, resulting in anomalies in customer Demat accounts. Blockchain is an immutable append-only data chain that is always developing. The SHA-256 cryptographic technique prevents data from being removed or changed after it has been inserted. There is no central database to maintain the chain; instead, each node stores a copy and processes data locally, updating it in milliseconds. In the form of fresh blocks, new information is added to the chain, ensuring that all parties have the same picture of the blockchain at all times. Everyone has access to the information, so they may verify and confirm transactions, in the end, resulting in complete transparency for all transactions. This work proposes a decentralized stock exchange architecture based on permissioned blockchain to address the T + 2 settlement cycle rule problem. Before designing this architecture it considers every aspect so, it excludes the traditional party name custodian member party because of its traditional functionality so that our architecture becomes cost-efficient at the time of implementation.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7

Similar content being viewed by others

Data availability

Not Applicable.

References

  1. Nakamoto S (2008) Bitcoin: a peer-to-peer electronic cash system [Online]. Available: https://bitcoin.org/bitcoin.pdf 

  2. Bohr J, Bashir M. Who uses Bitcoin? An exploration of the Bitcoin community, in 2014 Twelfth Annual International Conference on Privacy, Security and Trust, Jul. 2014, pp 94–101. https://doi.org/10.1109/PST.2014.6890928. Available: https://ieeexplore.ieee.org/abstract/document/6890928. [Accessed: Oct. 25, 2023]

  3. Böhme R, Christin N, Edelman B, Moore T (2015) Bitcoin: Economics, Technology, and Governance. J Econ Perspect 29(2):213–238. https://doi.org/10.1257/jep.29.2.213. Available: https://www.aeaweb.org/articles?id=10.1257/jep.29.2.213. [Accessed: Oct. 25, 2023]

  4. Di Francesco Maesa D, Mori P (2020) Blockchain 3.0 applications survey. J Parallel Distrib Comput 138:99–114. https://doi.org/10.1016/j.jpdc.2019.12.019. Available: https://www.sciencedirect.com/science/article/pii/S0743731519308664. [Accessed: Oct. 25, 2023]

  5. Sankar LS, Sindhu M, Sethumadhavan M (2017) Survey of consensus protocols on blockchain applications, in 2017 4th International Conference on Advanced Computing and Communication Systems (ICACCS) 1–5. https://doi.org/10.1109/ICACCS.2017.8014672. Available: https://ieeexplore.ieee.org/abstract/document/8014672/references#references. [Accessed: Oct. 25, 2023]

  6. Chander R, Mehta K (2016) Anomalous market movements and the rolling settlement: empirical evidence from Indian stock markets. Vision 11(4):31–44. https://doi.org/10.1177/097226290701100404. Available: https://doi.org/10.1177/097226290701100404. [Accessed: Oct. 25, 2023]

  7. Nair R, Bhagat A (2020) An application of blockchain in stock market, in transforming businesses with Bitcoin mining and blockchain applications, IGI Global 103–118. https://doi.org/10.4018/978-1-7998-0186-3.ch006. Available: https://www.igi-global.com/chapter/an-application-of-blockchain-in-stock-market/www.igi-global.com/chapter/an-application-of-blockchain-in-stock-market/238362. [Accessed: Oct. 25, 2023]

  8. Noble D, Patil K (2021) Blockchain in stock market transformation: A systematic literature review. Rev Gest Inov E Tecnol 11:5088–5111. https://doi.org/10.47059/revistageintec.v11i4.2551

    Article  Google Scholar 

  9. Al-Shaibani H, Lasla N, Abdallah M (2020) Consortium blockchain-based decentralized stock exchange platform. IEEE Access 8:123711–123725. https://doi.org/10.1109/ACCESS.2020.3005663. Available: https://ieeexplore.ieee.org/abstract/document/9127940. [Accessed: Oct. 25, 2023]

  10. Mahajan V, Sharma D (2017) Future of depository with introduction of payment bank: A game changer to capital market. Int J Appl Bus Econ Res 15:343–356

    Google Scholar 

  11. Johnson KN (2013) Governing financial markets: regulating conflicts. Wash. LAW Rev 88(1):185–244 Available: https://www.webofscience.com/wos/woscc/full-record/WOS:000344841700007. [Accessed: Oct. 29, 2023]

  12. Avgouleas E, Kiayias A (2019) The promise of blockchain technology for global securities and derivatives markets: The new financial ecosystem and the ‘Holy Grail’ of systemic risk containment. Eur Bus Organ Law Rev 20(1):81–110. https://doi.org/10.1007/s40804-019-00133-3. Available: https://doi.org/10.1007/s40804-019-00133-3. [Accessed: Oct. 29, 2023]

  13. Bernanke S (1990) Clearing and settlement during the crash. Rev Financ Stud 3(1):133–151. https://doi.org/10.1093/rfs/3.1.133. Available: https://doi.org/10.1093/rfs/3.1.133. [Accessed: Oct. 29, 2023]

  14. Al-Shaibani H, Lasla N, Abdallah M (2020) Consortium blockchain-based decentralized stock exchange platform. IEEE Access 8:123711–123725. https://doi.org/10.1109/ACCESS.2020.3005663. Available: https://ieeexplore.ieee.org/document/9127940/. [Accessed: Oct. 30, 2023]

  15. Antal C et al (2018) Decentralizing the stock exchange using blockchain an Ethereum-based implementation of the bucharest stock exchange. 459–466. https://doi.org/10.1109/ICCP.2018.8516610

  16. Bansal G, Hasija V, Chamola V, Kumar N, Guizani M (2019) Smart stock exchange market: A secure predictive decentralized model, in 2019 IEEE Global Communications Conference (GLOBECOM), Waikoloa, HI, USA: IEEE, 1–6. https://doi.org/10.1109/GLOBECOM38437.2019.9013787. Available: https://ieeexplore.ieee.org/document/9013787/. [Accessed: Oct. 30, 2023]

  17. Yuan Y, Wang F-Y (2018) Blockchain and Cryptocurrencies: Model, Techniques, and Applications. IEEE Trans Syst Man Cybern Syst 48(9):1421–1428. https://doi.org/10.1109/TSMC.2018.2854904. Available: https://ieeexplore.ieee.org/document/8419306. [Accessed: Oct. 30, 2023]

  18. Security, performance, and applications of smart contracts: A systematic survey. IEEE Journals & Magazine | IEEE Xplore. Available: https://ieeexplore.ieee.org/document/8689026. [Accessed: Oct. 30, 2023]

  19. Abou Jaoude J, George Saade R (2019) Blockchain applications – usage in different domains. IEEE Access 7:45360–45381. https://doi.org/10.1109/ACCESS.2019.2902501. Available: https://ieeexplore.ieee.org/document/8656511/. [Accessed: Oct. 30, 2023]

  20. Xia Q, Sifah EB, Smahi A, Amofa S, Zhang X (2017) BBDS: Blockchain-based data sharing for electronic medical records in cloud environments. Information 8(2):Art. no. 2. https://doi.org/10.3390/info8020044. Available: https://www.mdpi.com/2078-2489/8/2/44. [Accessed: Oct. 30, 2023]

  21. Architecture for Blockchain Applications 978–3–030–03034–6 dokumen.pub. Available: https://dokumen.pub/architecture-for-blockchain-applications-978-3-030-03034-6.html. [Accessed: Oct. 30, 2023]

  22. Chau P, Hu P (2001) Information technology acceptance by individual professionals: A model comparison approach*. Decis Sci 32:699–719. https://doi.org/10.1111/j.1540-5915.2001.tb00978.x

    Article  Google Scholar 

  23. Agarwal R, Sambamurthy V, Stair R (2000) Research report the evolving relationship between general and specific computer self-efficacy—an empirical assessment. Inform Syst Res 11:418–430. - References - Scientific Research Publishing. Available: https://www.scirp.org/(S(lz5mqp453edsnp55rrgjct55.))/reference/referencespapers.aspx?referenceid=2750118. [Accessed: Oct. 30, 2023]

  24. Karahanna E, Straub DW, Chervany NL (1999) Information technology adoption across time: A cross-sectional comparison of pre-adoption and post-adoption beliefs. MIS Q 23(2):183–213 https://doi.org/10.2307/249751. Available: https://www.jstor.org/stable/249751. [Accessed: Oct. 30, 2023]

  25. 7. The Blockchain - Mastering Bitcoin [Book]. Available: https://www.oreilly.com/library/view/mastering-bitcoin/9781491902639/ch07.html. [Accessed: Oct. 31, 2023]

  26. Rajendra Y, Subramanian V, Shukla SK (2023) BlockPaaS: blockchain platform as a service, in 2023 15th International Conference on Communication Systems & Networks (COMSNETS), Bangalore, India: IEEE 204–206. https://doi.org/10.1109/COMSNETS56262.2023.10041392. Available: https://ieeexplore.ieee.org/document/10041392/. [Accessed: Oct. 31, 2023]

  27. Bhandarkar VV, Bhandarkar AA, Shiva A (2019) Digital stocks using blockchain technology the possible future of stocks?. Int J Manag 10(3). https://doi.org/10.34218/IJM.10.3.2019/005. Available: http://iaeme.com/MasterAdmin/Journal_uploads/IJM/VOLUME_10_ISSUE_3/IJM_10_03_005.pdf. [Accessed: Oct. 30, 2023]

Download references

Funding

No funding received for this work.

Author information

Authors and Affiliations

  1. Department of Management Studies, Indian Institute of Information Technology-Allahabad, Prayagraj, India

    Supriya Kumari, Rachit Dwivedi, Pragya Singh & Aqdam Aslam

  2. Department of Information Technology, Indian Institute of Information Technology-Allahabad, Prayagraj, India

    S. Venkatesan

Authors
  1. Supriya Kumari
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rachit Dwivedi
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Pragya Singh
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Aqdam Aslam
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. S. Venkatesan
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Supriya Kumari.

Ethics declarations

Ethical approval

This article does not contain any studies performed by any of the authors with human participants or animals.

Informed consent

Not Applicable.

Conflict of interest

All authors declare that they have no conflict of interest for the presented work. All authors contributed to this paper.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Kumari, S., Dwivedi, R., Singh, P. et al. Reducing stock market settlement days using blockchain. Multimed Tools Appl (2024). https://doi.org/10.1007/s11042-024-18616-y

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s11042-024-18616-y

Keywords

Search

Navigation