See how the world's top ten stock exchanges use blockchain

Although reports often state that “banks are adopting blockchain technology,” this is not accurate. In fact, many financial institutions have already begun experimenting with this new technology.

The DTCC, a US clearing house that processes quadrillions of dollars in transactions each year, and Visa, a global credit card processing network, are just some of the most notable non-bank pilots. That said, some financial sectors are certainly more active than others.

Major stock and commodity exchanges are arguably the most active institutions in blockchain experiments. For example, Nasdaq, a major U.S. stock exchange provider, even released its own blockchain trading prototype last fall. The program, called Linq, can trade and track stocks of private companies. Nasdaq positioned it as an early trial of blockchain technology to expand the scope of major stock trading and even new asset classes.

Although there are more subtle differences in the field, the world's 10 major stock and commodity exchanges have expressed interest in blockchain technology. In this article, we will give you a detailed introduction:

1. Australian Stock Exchange (ASX)

The Australian Stock Exchange is one of the most ambitious companies when it comes to blockchain technology, investing more than $10 million in Digital Asset Holdings, a startup in the sector, in January as part of its research and development efforts.

Alongside the investment, the ASX also revealed that it would not only conduct technology trials, but also establish a new post-trade settlement system, which would be developed by Digital Asset using a distributed ledger structure.

However, updates on the project at the Australian Stock Exchange since January may have been overshadowed by controversy. In March, Australian news media began speculating that the blockchain project could be in doubt following the premature resignation of the agency’s CEO, Elmer Funke Kupper, despite the ASX having reiterated its support for the trial.

2. Chicago Mercantile Exchange Group

CME Group is one of the founders of the Post-Trade Distributed Ledger Working Group and has been very active in the industry through its investment arm, CME Ventures.

CME Group is unique among its peers in that it has been pursuing a diversified investment strategy across industries, including investments in distributed ledger startup Ripple, blockchain investment group Digital Currency Group and Digital Asset Holdings. However, other than that, CME Group has not publicly commented on its actions in technology and the larger industry.

3. Deutsche Börse

Deutsche Börse, operator of Germany’s Frankfurt Stock Exchange, is another player on the list, having also participated in Digital Asset Holdings’ $60 million funding round in January.

However, unlike its co-investor ASX, Deutsche Börse has been less vocal in its support for technology.

In an interview in February, Deutsche Börse said it was running a proof-of-concept for the technology, though it has yet to publish any findings or test results.

4. Dubai Multi Commodities Exchange

Blockchain activity in the Middle East has been sparse until the recent opening of the Global Blockchain Council, a 32-member group of startups, financial firms and tech giants that oversees the technology’s adoption and impact.

Building on these members, the Dubai Multi Commodities Center is a special economic zone and commodity distribution hub that oversees the trading of precious metals and other tangible commodities.

DMCC announced in February that it was engaging in a technology trial with bitcoin startup BitOasis to explore how blockchain technology could improve its onboarding process.

5. Japan Exchange Group (JPX)

Japan Exchange Group, one of Asia’s more active stock market operators, announced its interest in the sector in February and has formally aligned itself with IBM as a user of Blockchain-as-a-Service (BaaS).

At the time, reports indicated that the Japan Exchange Group was embarking on a proof-of-concept study to examine the role of blockchain technology in creating a new trading system for illiquid assets, with the results to be released in a report later this year.

Earlier this month, Japan Exchange Group also announced that it was working with Nomura Research Institute (NRI) to conduct trials to study how technology can be applied to securities markets.

6. Korea Stock Exchange

Korea Exchange, South Korea’s only stock exchange and one of the newer entrants to this list, announced in February that it would seek to launch an over-the-counter trading platform using blockchain technology.

In statements to local news media, Korea Exchange said it hoped the technology would help reduce costs. Details of the trial and the company's involvement in the group were not released.

7. London Stock Exchange (LSE)

The London Stock Exchange is one of the founding members of the Post-Trade Distributed Ledger Working Group and is one of the most active yet most low-key institutions when it comes to experimenting with blockchain technology.

The London Stock Exchange is one of the first major groups to follow in the footsteps of startup R3, and it is the first to suggest that a large financial firm will seek to use a collaborative model to test blockchains beyond R3’s framework.

It was also from that time that some large financial companies began to participate in private proofs of concept and operations in certain areas of the capital markets involving various parties.

In addition, along with Kouvola Innovation and Japan Exchange Group, the London Stock Exchange is one of the initial customers of IBM's Blockchain-as-a-Service (BaaS).

8. Nasdaq

When it comes to testing blockchain technology, Nasdaq is probably the most active institution. The US stock market operator Nasdaq first launched the private stock trading platform Linq in 2015, becoming the first financial institution to conduct a blockchain proof of concept. The platform is currently in the testing phase.

In addition, Nasdaq has also reached a cooperation with blockchain solution provider Chain and allowed its internal experts to talk openly about blockchain technology.

Nasdaq continued this momentum in 2016, for example, it previously revealed that it was working with Estonia's Nasdaq OMX Tallinn Stock Exchange on a trial to use blockchain technology to reduce various obstacles to shareholder voting.

9. New York Stock Exchange (NYSE)

The New York Stock Exchange was one of the first companies to take an interest in the industry, with the NYSE making two major announcements in 2015, both of which were related to Bitcoin.

In January 2015, the NYSE invested in Bitcoin service company Coinbase as part of its Series C funding round. At the time, NYSE Chairman Jeffrey Sprecher said the investment showed confidence in the widespread use of digital currencies by millennials, who he described as having a more progressive view of value exchange.

In May, the NYSE will continue to launch a bitcoin price index, which will also become a competitor to CoinDesk’s Bitcoin Price Index (BPI), which is drawn from trading data from the Coinbase exchange platform.

10. TMX Group

TMX Group, the operator of the Toronto Stock Exchange, has not yet made a clear statement on blockchain technology.

However, TMX first publicly expressed its interest in blockchain technology in March this year, with the hiring of Anthony Di Iorio (one of the co-founders of Ethereum) as the agency’s first chief digital officer. The next-generation network has become one of the most important blockchain applications in the public eye following its product launch in March.

Still, TMX Group has indicated that it is in the early stages of building a blockchain strategy and that it may soon conduct testing of the technology.

By Pete Rizzo

Translator: Zhu Kunda

Original: COINDESK