It would reduce the settlement time from multiple days to likely minutes.

When you trade a stock today, it’s not actually complete for 2 or 3 business days as it has to go through the settlement process. Generally, it doesn’t cause problems for retail traders, but even for us it can introduce real issues sometimes and delay you from making a trade.

For example, in Canada, the cheapest way we can convert CAD<–>USD is through a process called Norbits Gambit.

You buy DLR.TO (CAD) or DLR.U.TO (USD) and then your have them journal your shares from one to the other for free, or a small fee like $10. You don’t pay an exchange rate fee, however, because the trade hasn’t actually settled when you buy the shares for 3 days, they can’t journal them. So for 3 business days you’re exposed to any fluctuation in the exchange rate. Generally that’s cheaper than what a bank will charge you and it’s the risk you take. It’s also a 1 way risk, I can’t recall if it’s USD -> CAD or CAD -> USD, but one of them is locked in, and the other is exposed.

At WealthSimple, when you sell some shares, you can’t actually transfer the money to your bank account on the same day.

I’m sure it can cause more problems for professional traders and institutional stuff.