Blockchain for Financial Markets: Technology and Business Applications

London Financial Studies
Training overview
Professional Course
2 days
Start dates
New York City
Contact LFS for details

Course description

London Financial Studies Training

Blockchain for Financial Markets: Technology and Business Applications

Get past all the hype around blockchains and gain a definitive understanding of the current state, as well as realistic expectations, of this technology. Learn how distributed ledgers can be used to improve the security and accuracy of financial transactions and derivatives contracts.

Explore business cases for the application of distributed ledgers in the banking industry and how this can be affected by existing and planned regulations across the world. Workshops include examples of the blockchain logic in Excel and its current applications; as well as new tools that have already been developed by existing participants and new entrants in the market.

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Who should attend?

  • Quants / Financial Engineers
  • System developers
  • Risk Managers
  • Strategists, Researchers
  • Settlement and Back-office IT

Training content

Day One: From Bitcoins to Distributed Ledgers for Financial Markets


  • Digital currencies in a world with negative rates and electronic payments
  • The roles and the forms of money in modern economy
  • Money creation by central and commercial banks

Understanding Bitcoin

  • Transactions
    • Foundations of cryptography: hashing, symmetric and asymmetric cryptography, digital signature, examples
    • How transactions work
    • Pseudonimity
    • Wallets, Exchanges and other services
  • The Blockchain
    • Foundations of Distributed Databases: replication vs duplication, homogeneity vs etherogenity, examples
    • Blockchain: Logic, Structure, Security
    • The Blockchain as a Distributed Ledger
    • The UTXO (Unspend Transaction Amount)
    • Other Blockchain Services
  • Mining and proof-of-work
    • Foundations of State Machine Replication:fault-tolerance, single points of failure, determinism, transition function
    • The Consensus Protocol
    • Byzantine failure
    • Double-spending risk and Proof-of-work
    • From Game Theory to the reality of Mining

Hash functions, Private and Public Key Cryptography, and Transaction Signature

Evolution of Cryptocurrencies

  • Prices, stability, “monetary policy” for cryptocurrencies (Hayek coins, Inv and Sav wallets, Seignorage Shares)
  • The Bitcoin Scalability issue
  • Is Proof-of-Stake possible?
  • Non-Turing complete: Multisig and nLockTime but no smart contracts
  • The concrete possibility of BitDollar, EuroCoin or BitOfEngland: a central bank cryptocurrency
  • Settlement coins: banks from money creation to management

From Bitcoins to Banking: Payments

  • Banks in front of transforming payments (Paypal, Apple Pay, Google, etc.)
  • Cross-Border Payments
  • The Ripple™ model
  • Payment channels and other scalability solutions
  • Cryptography and its risks – Security, Privacy, Identity
  • Disintermediation and Reintermediation

Day Two

From Bitcoins to Finance: Smart Contracts and Ledgers

  • From paper to Digital Contracts
  • Contract Code Managing a Transaction
  • Szabo and Ricardian Contracts
  • Ethereum: How it works, Virtual Machine, accounts
  • Ethereum Smart Contracts
  • What to learn from TheDAO hack
  • What is known of other projects:
    • R3 CEV’s CORDA, the Distributed Ledger for Financial Contracts
    • Side-chains, the proposed Bitcoin extensions
    • HyperLedger Project for Interoperability
    • Which Consensus for Financial Markets

Blockchain and Distributed Ledgers in Financial Markets: a market and business reform

  • From hype to skepticism, aiming at realism
  • Financial Market Problems: consensus by reconciliation
  • Too much Trust: Slow Transactions, Costly Duplication, Opacity, Litigations
  • The Risk Consequences: Operational Risk, Credit Risk and Capital requirement
  • Can we really apply “Blockchain Technology” to these problems?
  • From Fintech-hype to a possible business reform enabled by aspects of Tech
  • Which business impact from distributed ledgers?
    • Removing hidden trust in business steps
    • Shared accounting on a DLT
    • More efficient automation through smart contracts
    • Cryptosecurity to go beyond centralization

The Business Cases

  • Post-trading workflow
  • Securities: bonds and equity
  • DLT for T+0 and Smart Contracts for riskless symultaneous deliveries and payments
  • Using the Ledgers for Voting Rights
  • From Coloured Coins to Ricardian Contracts
  • Escrow services, trade finance and letters of credit
  • From Order-book to Clearing and Settlement on Distributed Ledgers
  • Impact on the other players in DLT world: Exchanges, Trade Repositories, Custodians, CCPs and other Financial Market Infrastructures
  • Focus on CCPs: replacing them or improving them?

A Detailed Case Study: Collateralized Derivatives

  • Variation and Initial Margin. The issue of Reconciliation
  • The Margin Period of Risk and The Default Closeout. The consequences of Opacity
  • The regulatory response: SIMM, CCPs, Capital regulations
  • The CVA/DVA, FVA and Capital costs of imperfect collateral
  • Smart CSA Contract for the Variation and Initial Margin
  • The workflow on a Distributed Ledger
  • Smart Contract automation to reduce Risk and Capital. Role of regulators
  • Netting automated algorithms
  • The issue of the Valuation Oracle

Workshop: Managing Collateralized Derivatives with Smart Contracts on Blockchains


  • Bringing data into the Blockchain
  • Shelling Point. The Markit Totem™ model
  • TLS for communication between different networks and Intel SGX for cloud computing in private networks
  • Data providers for DLT. The future of data in DLT

Blockchains and Regulation

  • The first regulations made on cryptocurrencies. The opinion of regulators
  • The existing regulations that are restraining technological innovation
  • How accounting and legal would be impacted
  • Which regulations could adapt to increased automation and transparency


The cost of the Blockchains and Distributed Ledger Technology training course is available upon request.

Certification / Credits

London Financial Studies is registered with CFA and GARP Institute as an Approved Provider of continuing education programs. GARP & CFA Institute members attending this course are eligible for 16 CE/CPD credits

About London Financial Studies

London Financial Studies

Global markets move quickly, evolving continuously and deepening in complexity. Over the past decades London Financial Studies has provided specialist executive education programs and short courses focused exclusively on global capital markets. Preparing only the highest quality and most relevant...

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