I don't see how blockchain fixes any of the clearing/settlements issues in a way which is better than a trusted third party (or which doesn't involve trusted third parties).
Let's take settlements. Some instruments are (still, in this day and age) ultimately issued in bearer form (ie, if you have the piece of paper, you own the bond/shares/title to the land/whatever, just like cash). This has a number of problems (you'd be surprised how many people lose bearer instruments). There's a similar, but less serious, problem with requirements for paper certificates in registered form.
The only real way to fix those is to change the law so that instruments can be dealt with in purely electronic registered form and the bearer instruments don't exist to start with.
Some jurisdictions haven't changed the law to allow this so we are stuck with legal title being bearer or paper certificate based. Blockchain by itself as such can't fix the problem of "what happens if you lose the instrument" and can't fix the problem of "what happens if you refuse to hand over the instrument in performance of a valid contract".
A trusted third party (nominee/custodian/etc), by contrast, can fix some of this pretty well (trusted third party keeps the instrument in a vault and issues its own electronic registered form instruments which confer "good enough" title most of the time).
i did not make myself clear (i should stop
posting from my phone).
i was trying to say that the sizzle was more than the reality - a trusted (neutral) third party will solve all the claimed issues - it's just that the reason this has not happened in many sectors is because the issues the third party / blockchain can solve are not the issues preventing adoption - it's like car manufacturers would like to dump their dealers and sell direct - but no one is prepared to risk a huge downside. Tesla might be "disruptive" but no one seriously thinks Tesla will replace all other car sales - and so dealer networks will remain (for a while).
Let's take settlements. Some instruments are (still, in this day and age) ultimately issued in bearer form (ie, if you have the piece of paper, you own the bond/shares/title to the land/whatever, just like cash). This has a number of problems (you'd be surprised how many people lose bearer instruments). There's a similar, but less serious, problem with requirements for paper certificates in registered form.
The only real way to fix those is to change the law so that instruments can be dealt with in purely electronic registered form and the bearer instruments don't exist to start with.
Some jurisdictions haven't changed the law to allow this so we are stuck with legal title being bearer or paper certificate based. Blockchain by itself as such can't fix the problem of "what happens if you lose the instrument" and can't fix the problem of "what happens if you refuse to hand over the instrument in performance of a valid contract".
A trusted third party (nominee/custodian/etc), by contrast, can fix some of this pretty well (trusted third party keeps the instrument in a vault and issues its own electronic registered form instruments which confer "good enough" title most of the time).