Nasdaq, the second largest stock exchange in the world, is developing a platform for the issuance and trading of security tokens
Nasdaq’s potential venture into the security token market has seen the New York-based financial services company engage several blockchain startups, including Symbiont, in its efforts to develop the platform, which is planned to handle both the issuance of security token offerings (STOs) as well as secondary market trading.
The key difference between security tokens and today’s cryptocurrencies and digital tokens is that they are compliant with regulations and securities laws. Nasdaq’s push into the tokenized securities market is a testament to the potential of security token offerings becoming an integral part of the capital markets. Nasdaq’s new platform would compete with the likes of tZERO and TokenTrust.
The planned tokenized securities trading platform would not be Nasdaq’s first venture into the world of blockchain. It’s blockchain-powered private share issuance platform Linq enabled Chain.com to digitally represent a record of ownership while reducing settlement time and alleviating the necessity for paper-based share certificates.
“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 The implications for settlement and outdated administrative functions are profound,” said Bob Greifeld, Nasdaq’s CEO at the time.
In the same year, Nasdaq also announced the launch of a pilot for a blockchain-powered proxy voting system for companies listed on its Estonian exchange. The blockchain platform allowed shareholders who are not able to attend shareholder meetings to vote electronically.