Earlier last month, NASDAQ had announced that it will start experimenting with the Bitcoin Blockchain for stock market applications. Within a month of the announcement, NASDAQ’s parent company NASDAQ OMX Group Inc. has partnered with a start-up that works on Bitcoin technology.
The company announced its partnership with San Francisco based Chain to run a pilot project involving Blockchain technology for share trading in private companies. NASDAQ OMX Group plans to conduct Blockchain trials on its NASDAQ Private Market which allows people to trade pre-IPO shares in private companies. The implementation of Bitcoin technology into Nasdaq Private Market will be managed by Chain.
Apart from being a ledger for Bitcoin transactions, Blockchain can be used for various other applications across domains. It is being extensively used in fintech, intellectual property management, records management and more. Blockchain offers a fast, secure, transparent and inexpensive way to store and manage data. It can be an ideal system for stock market like NASDAQ where they have to manage huge amounts of data and following traditional methods involves tons of paperwork. Not to mention the role of lawyers in creating contracts, notarizing documents etc. With Blockchain and smart contracts, most of these things can be automated leading to reduced costs and man power requirement.
Before partnering with NASDAQ, Chain has been providing necessary Blockchain infrastructure and services for financial institutions, enabling them to use bitcoin and Blockchain to transfer money and assets in a secure and instantaneous way.
As a part of NASDAQ pilot project, Chain will become the first company to trade its shares on Blockchain. The pilot project is expected to be launched sometime later this year. Apart from the NASDAQ partnership, Chain has recently entered into a partnership with Gyft to provide gift card offerings for small businesses.
New York Stock Exchange is another such institutions actively involved in Bitcoin and Blockchain technology. NYSE has been supporting Coinbase and it has also included Bitcoin Price Index to the list along with other commodities and currencies.