Enterprise Blockchain platform provider Chain, Inc. made history Wednesday when it became the first company to successfully complete and record a private securities transaction on the Nasdaq stock exchange using Blockchain technology.
The transaction took place using Nasdaq’s Linq Blockchain implementation and saw the stock exchange enabling Chain to digitally represent a record of ownership while significantly reducing settlement time and eliminating the need for paper stock certificates.
In addition to its core equity management function, the Nasdaq Linq Blockchain platform is also said to provide issuers and investors an ability to complete and execute subscription documents online.
“We believe this successful transaction marks a major advance in the global financial sector and represents a seminal moment in the application of Blockchain technology,” Nasdaq Chief Executive Officer Bob Greifeld said in a statement. “Through this initial application of Blockchain technology, we begin a process that could revolutionize the core of capital markets infrastructure systems. The implications for settlement and outdated administrative functions are profound.”
While this transaction using Nasdaq’s Blockchain platform is only a small step, it’s also a sign of where we are heading in the future, a future that involves the Blockchain revolutionizing the financial world.
The use of the Blockchain presents financial markets with a range of benefits, but most sit around a core of cutting out the middleman: Trade settlement for transactions in public markets are made directly between the buyer and seller, resulting in far faster transactions at a lower cost. In Nasdaq’s words, the Blockchain as they are implementing it has the potential to assist in expediting trade clearing and settlement from the current equity market standards of three days to as little as 10 minutes.
“As a result, settlement risk exposure can be reduced by over 99 percent, dramatically lowering capital costs and systemic risk,” Nasdaq notes. “In addition, this technology could allow issuers to significantly lower the risk and the administrative burden of what is largely a manual and multi-step process today.”
Viva la Blockchain revolución.
Image credit: bfishadow/Flickr/CC by 2.0
Duncan is a co-founder of VC funded media company B5Media and founder of news site The Inquisitr, and was a senior writer at TechCrunch in its earlier days.
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