The first ever trade in private securites using a blockchain ledger took place on the Nasdaq today, the company has announced.
The trade was for Chain.com, a newly listed blockchain developer, which issued shares to a private investor using Nasdaq’s Linq blockchain ledger.
Nasdaq had announced it was exploring the blockchain for private trades earlier this year.
The blockchain is the technology behind bitcoin, innovative because it eliminates the “double spend” problem by verifying transactions publicly, in multiple places. The idea of a distributed ledger holds countless applications, from finance to elections.
Numerous financial institutions have started experimenting with the technology, as the ledger allows for peer-to-peer transactions that are verified publicly, removing the need for a trusted intermediary.
Among other things, this means faster clearance times, and a reduced need for paperwork and staff. Hence Nasdaq’s interest – the company claims it could bring down settlement and clearance times to as little as ten minutes. Settlement currently takes around three days in most marketplaces.
Lowering settlement this drastically would significantly lower capital costs, systemic risk, and administrative burden.
“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,” said Nasdaq’s CEO Bob Greifeld.
“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 The implications for settlement and outdated administrative functions are profound.”
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