Nasdaq Linq in blockchain breakthrough
05 January 2015 New York
Image: Shutterstock
Nasdaq has completed the first private securities issuance using blockchain technology in what it has called a ‘proof of concept’ use of the technology, which could reduce risk exposure by 99 percent.
The Nasdaq Linq blockchain ledger technology was used to complete and document a securities transaction between issuer Chain.com, a blockchain developer, and a private investor.
Issuers can digitally represent a record of ownership using Nasdaq Linq, removing the need for paper stock certificates, while both issuers and investors have the ability to complete and execute subscription documents online, reducing administrative burden.
According to Nasdaq, this use of blockchain could reduce trade clearing and settlement times from the current standard of three days to about 10 minutes, and could reduce risk exposure by up to 99 percent.
This milestone could also pave the way for trade settlement transactions using blockchain in public markets.
Bob Greifeld, CEO of Nasdaq, said: "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."
He added: "Through this initial application of blockchain technology, we begin a process that could revolutionise the core of capital markets infrastructure systems. The implications for settlement and outdated administrative functions are profound."
CEO of Chain.com Adam Ludwin, said: "We couldn't be happier with the results of the transaction. It was seamless and met our objective of drastically reduced manual ownership transfer."
The Nasdaq Linq blockchain ledger technology was used to complete and document a securities transaction between issuer Chain.com, a blockchain developer, and a private investor.
Issuers can digitally represent a record of ownership using Nasdaq Linq, removing the need for paper stock certificates, while both issuers and investors have the ability to complete and execute subscription documents online, reducing administrative burden.
According to Nasdaq, this use of blockchain could reduce trade clearing and settlement times from the current standard of three days to about 10 minutes, and could reduce risk exposure by up to 99 percent.
This milestone could also pave the way for trade settlement transactions using blockchain in public markets.
Bob Greifeld, CEO of Nasdaq, said: "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."
He added: "Through this initial application of blockchain technology, we begin a process that could revolutionise the core of capital markets infrastructure systems. The implications for settlement and outdated administrative functions are profound."
CEO of Chain.com Adam Ludwin, said: "We couldn't be happier with the results of the transaction. It was seamless and met our objective of drastically reduced manual ownership transfer."
NO FEE, NO RISK
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
100% ON RETURNS If you invest in only one asset servicing news source this year, make sure it is your free subscription to Asset Servicing Times
