Chain, the startup helping Nasdaq build its blockchain-powered securities platform, has issued shares on it.
Chain, previously engaged in providing Bitcoin blockchain data and API services, has shifted focus towards developing blockchain solutions for capital markets during the past year. It recently discontinued its free API service.
Bitcoin’s blockchain and other distributed ledger systems inspired by it are envisioned to streamline the settlement process of securities trades and fiat payments.
Nasdaq partnered with Chain to develop the platform, later named ‘Linq’, that is currently being piloted on Nasdaq’s Private Market. The market facilitates the exchange of pre-IPO shares, whose settlement is said to have been facilitated by lawyers manually entering data into Excel spreadsheets.
Nasdaq is also one of the main backers behind Chain’s recent $30 million funding round, which stands as the largest investment in a crypto startup since April.
Make or Break Decision: Finding the Liquidity Provider Thats Best for YouGo to article >>
In an announcement, Nasdaq touted the move as the “first-ever private securities issuance documented with blockchain technology.” It noted that the transaction significantly reduced settlement time and eliminated the need for paper stock certificates.
Nasdaq CEO Bob Greifeld said the transaction “marks a major advance in the global financial sector and represents a seminal moment in the application of blockchain technology.”
He further stated: “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 The implications for settlement and outdated administrative functions are profound.”
The project’s initial target was to successfully pilot Private Market share transfers by the end of this year, so the transaction may be viewed as a fulfillment of this goal. If the pilot is successful, Nasdaq is considering building out the technology for its main exchange.
Chain isn’t the first to claim such a feat. Overstock.com has also been issuing securities over its blockchain-powered tØ platform, which was recently approved by the US Securities and Exchange Commission (SEC) for a larger securities issuance.