Stock exchange operator reportedly testing blockchain technology for private share trading
Bitcoin trading could be set to get its most high-profile approval yet following reports that the NASDAQ stock exchange is testing the technology that supports its trading.
The New York-based stock exchange operator is evaluating blockchain, the underlying technology behind digital currency bitcoin, in order to see if it could be used in trading of shares in private companies, the Wall Street Journal reports.
If successful, Bitcoin could soon be used in stock market trading, marking a remarkable revolution in one of the financial world’s oldest institutions.
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Blockchain technology could hold the potential to “benefit not only our clients, but the broader global capital markets,”, said NASDAQ chief executive Robert Greifeld, although ensuring the security of the platform remains a key concern.
“Utilising the blockchain is a natural digital evolution for managing physical securities,” he added.
NASDAQ intends to test blockchain in the Nasdaq Private Market exchange, which handles pre-IPO trading among private companies, often using largely informal systems such as spreadsheets.
Blockchain ledger proves an enticing partner for stock exchanges, as it is maintained and updated by a global network of independent computers known as miners, meaning the currency is therefore not dependent on third parties or middlemen for its transactions.
Bitcoin and the technology behind it has seen some significant investment in recent months, suggesting it may not be a flash-in-the-pan trend.
In January, bitcoin-trading platform Coinbase announced a $75m funding round which included investment from the New York Stock Exchange unit of Intercontinental Exchange, and a few weeks ago, Goldman Sachs invested in bitcoin consumer-services company Circle Internet Financial as part of a $50m funding round..
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