Nasdaq OMX Group, Inc. has unveiled its planned use of so-called distributed ledger, or blockchain, technology to facilitate the issuance and transfer of shares.
The new Nasdaq Linq platform will utilize blockchain technology to facilitate the issuance, cataloging, and recording of transfers of shares in privately held companies on The NASDAQ Private Market, the exchange operator announced on Tuesday. It also announced six private companies that will use the new platform.
“We are extremely encouraged by the initial demand for Nasdaq Linq from these innovative, first-mover companies, and the validation it represents of our application of blockchain technology,” said Bob Greifeld, CEO of Nasdaq, in a statement. “Blockchain applied to the private market is innovation built on top of innovation, and carries with it the opportunity to forever alter the future of financial services infrastructure.”
Blockchain technology was first developed to create and issue digital currencies such as Bitcoin, and is now being adopted by the mainstream financial industry as a possible way to make certain sorts of transactions and record-keeping functions safer and more efficient.
The new blockchain platform was developed in-house at the exchange, Nasdaq says, in collaboration with blockchain technology provider, Chain.com, and design firm, IDEO. Chain.com is also one of the companies that will be using the new platform on the Nasdaq Private Market.
“Chain is thrilled to be powering Nasdaq Linq and to be an inaugural client of this innovative new platform,” said Adam Ludwin, CEO of Chain.com. “We are excited to leverage Nasdaq Linq to issue and manage our company’s securities in a more efficient and transparent way.”
Nasdaq also recently announced it will undertake an effort to manage proxy voting via blockchain technology in Estonia, as its next proof-of-concept for the company’s blockchain initiative.