Nasdaq, the world’s second-largest stock exchange in the world has utilized its Nasdaq Linq blockchain ledger technology to settle a private securities transaction of established blockchain software developer and infrastructure provider Chain.com.
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,” announced Nasdaq CEO Bob Greifeld..
“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 The implications for settlement and outdated administrative functions are profound.”
According to Nasdaq, the Proof of Concept and blockchain network used by Chain.com significantly reduced settlement time and costs for paper stock certificates. Because of the greater level of transparency of the blockchain technology, investors and issuers are enabled to track and view official documents online, with ease.
The process of the transaction and asset settlement implemented by Nasdaq’s Linq technology is completely automated, eliminating the need for third party applications and mediators to interfere with the network’s transactions.
“No doubt this is a powerful milestone for Chain and our partnership with Nasdaq,” said Adam Ludwin, CEO, Chain.com. “We couldn’t be happier with the results of the transaction. It was seamless and met our objective of drastically reduced manual ownership transfer.”
Nasdaq plan to test the technology for proxy voting in Estonia later this year and are working to develop an enterprise-wide blockchain-based applications for banks, financial institutions and government agencies.
Although Nasdaq claims to be the “first-ever” organization to issue private securities documented with the blockchain technology, former JPMorgan Executive Blythe Masters’ blockchain startup Digital Asset Holdings issued convertible notes using its blockchain-based software to help online and mobile gaming application secure investment from venture capital firms and angel investors.
“Digital Asset is proud to have provided the technology to permit Pivit and its investors to take advantage of the efficiency, speed and security of issuance of a private security on the blockchain,” said Blythe Masters, CEO of Digital Asset. “The issuance is an important milestone in demonstrating the potential of blockchain technology.”
From recognized group of investors including video game programmer Igor Tulchinsky, professional poker player Erik Seidel, REDI Global technologies chairman Howard Edelstein and WorldQuant Ventures, Pivit completed a multi-million dollar funding round on the blockchain network.
Overstock CEO Patrick Byrne’s blockchain venture t0 also utilized a cryptographically-protected Bitcoin blockchain network to help companies and organizations to obtain loans and issue shares with a greater level of transparency.
Earlier in December, the Securities and Exchange Commission of the United States approved Overstock to issue its comapny stock on t0.com and their plans to use the blockchain technology to issue private bonds.
Byrne then told Wired Magazine in an exclusive interview that he believes the blockchain technology “can do for the capital market what the Internet has done for consumers.”