The Quiet Risk Blockchain Could Address
4/3/2025
Risk teams have heard the blockchain buzz before—but one push isn’t about crypto. It’s about addressing a long-standing banking headache: settlement risk.
At a recent RMA New York Chapter event, industry experts laid out how adopting blockchain could upgrade key banking processes. Here are some key takeaways:
Blockchain’s best near-term use cases? Payments and settlement. Blockchain is gaining traction where it can ease real operational pain. “Payments are a great use case for blockchain,” said Renée Berman, managing director at DTCC Digital Assets. More banks are launching products that enable real-time cash movement on-chain, and Berman expects to see even more “instantaneous movement of cash on public blockchains.”
But moving securities to the blockchain isn’t just about digitizing assets—it also requires rethinking how money moves. Without a way to transfer cash on-chain at the same speed, you can’t fully realize blockchain’s promise for capital markets. “You can’t have it on its own; you need to sort out liquidity or cash on chain,” said Digital Asset’s Kelly Mathieson. In other words, blockchain-based settlement only works if both sides of the trade—assets and payments—can happen seamlessly.
Settlement risk is the quiet monster—and blockchain could finally tame it. Settlement may not grab headlines, but it’s a key driver of trading risk across capital markets. “The dirty little secret is that settlement risk has been the binding condition for almost all of these activities,” said Mathieson, referring to the trading and post-trade processes that depend on the timely exchange of assets and payments. Blockchain, by enabling near-instant and verified settlements, has the potential to “eliminate that risk.”
New tech, new risks. Cynthia Behnen-Gillison of RSM emphasized that blockchain adoption touches multiple pillars of enterprise risk—information security, IT infrastructure, internal controls, and more. Her advice: Be ready to ask the tough questions, and don’t wait until your business lines are already moving forward.
