Blockchains can be and are being used to improve this system. Tokens trade continuously 24/7, settle faster and increase distribution. Yet, unless the tokens themselves are the assets they’re supposed to represent, then they’re just creating a countless amount of digital wrappers around the actually important paper certificates.
Wall Street has already lived through a version of this story, in the Paperwork Crisis. In the late 1960s, an unexpected surge of trading volume overwhelmed the manual, paper-based system used to process and clear stock transactions, causing back offices to fall catastrophically behind. For half a year, the NYSE was forced to close on Wednesdays to clear the backlog.
Compounding the issue — there was not a single authoritative list of who owned what.
The industry eventually solved the crisis by shifting from decentralized physical tracking to centralized digital recordkeeping. The Depository Trust…
