Exchange operator Nasdaq OMX is set to start using blockchain technology for the issuance, transfer and management of private company securities.
The firm is tapping the Open assets Protocol colored coin initiative to create blockchain-enabled digital ledger technology at its Nasdaq Private Market platform, which is used by private companies for pre-IPO trading.
The technology is slated to be introduced later this year, with Nasdaq OMX arguing that the blockchain will provide integrity, audit ability, governance and transfer of ownership capabilities.
The Nasdaq Private Market experiment is just the opening use of the blockchain in what will be an "enterprise-wide" embrace of the distributed ledger that will be led by Fredrik Voss, who has been named the company's Blockchain Technology Evangelist.
Bob Greifeld, CEO, Nasdaq, says: "Utilizing the blockchain is a natural digital evolution for managing physical securities. Once you cut the apron strings of need for the physical, the opportunities we can envision blockchain providing stand to benefit not only our clients, but the broader global capital markets.
"Our initial application of Nasdaq's blockchain technology-enabled offering will modernize, streamline and secure typically cumbersome administrative functions, and will simplify the overwhelming challenges private companies face with manual ledger record-keeping."