Vidya Ramadhan Putra Pratama

The Application of Blockchain Technology in Stock Trading Efficiency

Introduction

The application of blockchain technology in stock trading efficiency. Explore blockchain's potential to enhance Indonesia's stock trading efficiency, optimizing execution, clearing, and settlement. Discover benefits and address key implementation challenges.

Abstract

Indonesia’s stock market has grown rapidly in volume and retail participation, creating increasing pressure on market infrastructures to deliver faster, more transparent, and more secure end-to-end processes. This study examines the potential of blockchain technology to enhance the efficiency of stock trading processes, covering trade execution at the Indonesia Stock Exchange, clearing performed by the Indonesia Clearing and Guarantee Corporation, and settlement and asset recording conducted by the Indonesian Central Securities Depository. Using a systematic literature review, the study synthesizes evidence from reputable academic databases and institutional publications through a structured selection approach and critical appraisal. The findings indicate that blockchain introduces substantial opportunities to accelerate transaction processing, strengthen data integrity, streamline clearing workflows, enable near real-time settlement, and automate corporate actions through smart contracts. Nevertheless, the study also reveals significant challenges, including limitations in scalability, infrastructure investment requirements, regulatory gaps, governance complexity, and the need for high-level technical readiness among market institutions. The study concludes that blockchain can serve as a transformative infrastructure for Indonesia’s capital market, provided its implementation follows a phased approach supported by rigorous pilot testing and clear regulatory frameworks.

Review

This paper, "The Application of Blockchain Technology in Stock Trading Efficiency," addresses a highly pertinent issue given the rapid growth and increasing demands on Indonesia's stock market infrastructure. The study's objective to examine how blockchain technology can enhance the efficiency of core trading processes—from execution at the Indonesia Stock Exchange to clearing by the Indonesia Clearing and Guarantee Corporation and settlement/asset recording by the Indonesian Central Securities Depository—is well-defined. The use of a systematic literature review to synthesize evidence from reputable academic and institutional sources is an appropriate methodological choice for exploring the potential and challenges of this transformative technology. The findings presented offer a comprehensive and balanced perspective. On one hand, the study highlights substantial opportunities for blockchain to accelerate transaction processing, strengthen data integrity, streamline clearing workflows, enable near real-time settlement, and automate corporate actions through smart contracts. These identified benefits underscore the significant potential for operational improvements and cost efficiencies. Conversely, the research candidly reveals critical challenges, including limitations in scalability, substantial infrastructure investment requirements, existing regulatory gaps, governance complexities, and the necessity for high-level technical readiness among market institutions. This balanced portrayal is a strong point, providing a realistic assessment for stakeholders. The study concludes that blockchain possesses the potential to be a transformative infrastructure for Indonesia’s capital market. However, it wisely tempers this optimism with practical recommendations, emphasizing the necessity for a phased implementation approach, rigorous pilot testing, and the establishment of clear regulatory frameworks. This cautious yet forward-looking conclusion provides valuable guidance for policymakers and market participants considering blockchain adoption. Overall, this paper makes a significant contribution by thoroughly outlining both the promising advantages and formidable obstacles associated with integrating blockchain into the stock trading ecosystem, particularly within the context of a rapidly evolving market like Indonesia's.

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