Just before the new year, Nasdaq announced that it had successfully completed and recorded a private securities transaction on its Nasdaq Linq blockchain. Initial Nasdaq Linq client, Chain.com, who provide blockchain infrastructure to financial enterprises, documented the shares issued to a private investor. Previously, Nasdaq has announced its exploration of blockchain technology for proxy voting and further blockchain initiatives are expected this year.
Nasdaq has shown a vastly improved efficiency by cutting out the need to keep paper stock certificates and reducing settlement time by using the digital record instead of traditional means. As well as allowing issues to store a digital record, the Nasdaq Linq additionally enables issuers and investors to complete and execute subscription documents online.
Potential trade clearing and settlement time reductions using blockchain technology have been suggested as decreasing to as little as ten minutes – around 99% of the traditional three day standard – with corresponding capital costs savings and reduction in systematic risk. Additionally, there is potential to significantly reduce current risk and administrative burden.
CEO of Nasaq, Bob Greifeld stated: “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. 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 The implications for settlement and outdated administrative functions are profound.”
Adam Ludwin, CEO of Chain.com, remarked: “No doubt this is a powerful milestone for Chain and our partnership with Nasdaq. 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 claims to be the first to issue shares on a blockchain. However, in August 2015, Symbiont issued smart securities on the bitcoin blockchain.