Nasdaq Is Planning A Tokenized Securities Platform

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Nasdaq has expressed its interest to join the crypto world. Indeed, the largest financial stock exchange in the US has been giving signals that it wants to be part of the digital financial world for a while now. The financial services company already has a footprint in this market having pioneered several blockchain projects. The new plan involves building a platform that allows it to issue security tokens as well as facilitate trade.

Security tokens have been attractive in the crypto world for a long time. The tokens are basically financial assets that can be used as equity. Tokenized securities are a result of the evolution of the blockchain world. They are compliant with new regulations and this makes them formidable securities in the financial world. Considering how big companies like Nasdaq have embraced these securities, they truly have potential in the financial world.

There are already other platforms in the market including TokenTrust and tZERO. Nasdaq is thus expected to venture into a market that is established and where the competitors have a footprint.

Nasdaq is an established player in the blockchain world

Nasdaq is not a stranger in the crypto world though. The company has been involved with various projects over the course of the decade. One of the early blockchain startups it was involved in is Chain.com. Nasdaq issued private securities of this company back in 2015 thus demonstrating its commitment to the crypto financial world. The company was able to do this through Linq, its private share issuance platform.

The arrangement between Linq and Chain.com was typical of modern digital financial systems. There were no physical records signed between the two parties but only virtual issuances of certificates. For Nasdaq, achieving this feat was a testament to the objectives of the company.

Nasdaq’s CEO at the time, Bob Greifeld had positive sentiments to give after the transaction. He reckoned that the company’s use of the blockchain system demonstrated that changes in the financial and capital markets were set to ensue. Indeed, the transaction marked the beginning of the change in the capital markets.

Other than carrying out this transaction, Nasdaq also publicly revealed the pilot program for its proxy voting system. The blockchain-powered technology had been in the works for some time and Nasdaq hoped that it would help the companies listed on its Estonian exchange to take part in meetings. The electronic system would allow shareholders to vote electronically and thus remove the geographical barrier.

In 2018, Nasdaq has been working on other projects. Johan Toll, head of Blockchain Product Management at the company, indicated that a mutual funding platform backed by blockchain was in the works. This solution will be among the first to reduce the manual nature of arrangements in the mutual funding world. It will also cut the instances of mistakes by a huge margin. The new platform has already been tested in Sweden with the help of SEB. For Nasdaq and SEB, there is a huge potential in the mutual fund markets since things are still being done in the traditional and largely non-electronic ways.