I am not sure, whether this question is on-topic here, but it is microstructure related, is of concern to practitioners and addresses a question which is often debated in academia.
When it comes to discussing blockchains, I often encounter the argument that blockchains technology helps to improve liquidity, especially as it speeds up settlement time (see for example this paper). I admit that I do not know how settlement of, say, equity trades, is really working on financial markets so I have to relay on what I read in papers and books: - Often it is said, that the settlement of a stock trade in the USA generally requires three business days to pass between brokers and theirs clients and to formally move ownership from seller and buyer. Clearly, recording transactions via blockchains could speed up things extremely (the bitcoin blockchain is updated roughly every 10th minute). However, I am not sure whether this really affects liquidity: Aren't these 3 days to fix the settlement just some form of administration which are not relevant for the trader anymore? Or do these tasks produce such severe costs that fixing everything much faster and elegant via a blockchain benefits the trader?