Nasdaq has announced that a privately owned company Chain.com has pioneered in blockchain-based share issuance, using a system provided by the exchange.
According to the press-release issued on Wednesday 30 December, Chain.com – a blockchain infrastructure provider to financial institutions and enterprises – has inaugurated Nasdaq Linq distributed ledger technology in order to issue shares to a private investor. Nasdaq reports that during this transaction a record of ownership was represented in digital form, which required less settlement time as well as allowed to manage without paper stock certificates. In addition to that, Nasdaq Linq permits issuers to complete and execute subscription documents online.
“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 The implications for settlement and outdated administrative functions are profound,” said Bob Greifeld, Nasdaq CEO.
Besides, the press-release claims use of blockchain can significantly accelerate clearing and settlement of equity transactions on public markets – from the period of three days to ten minutes. The result would be the reduction of settlement risk exposure which means lowering capital costs and system risk.
The press-release indicates that further progress with Nasdaq's enterprise-wide blockchain initiatives will be expected to be announced in 2016.
Earlier in December CoinFox reported that Securities and Exchange Commission (SEC) of the USA had allowed Overstock.com, an online retail company, to issue securities via blockchain.