Blockchain technology has moved beyond the lab and has been applied in financial services

Blockchain is moving beyond the labs, with distributed ledger technology beginning to be used in financial services, participants at the recent International Commodities and Derivatives Association (ICDA) conference said.

Nasdaq’s team of engineers began working on distributed ledger technology two and a half years ago, Fredrik Voss, Nasdaq’s vice president and head of blockchain, said during a discussion at the ICDA blockchain conference in London.

Last December, Nasdaq's Linq blockchain ledger technology was used to complete and record Chain's private securities transactions. Voss said this is the only legal representation of the shares, which can be transferred to investors in the secondary market. Nasdaq said blockchain technology can reduce stock clearing and settlement time from 3 days to 10 minutes and reduce settlement risk by 99%.

Voss said:

“We chose the private markets because they are relatively unsophisticated and the current state of the art in that sector is limited. As we tackle more complex markets, we will enter areas that are not regulated by law.”

Fredrik Voss

In February, Nasdaq and the Republic of Estonia jointly announced a blockchain-based e-voting pilot project that allows shareholders of companies listed on the Estonian regulated securities market, the Nasdaq Tallinn Stock Exchange, to vote electronically at company meetings. The platform uses the e-Residency platform, an electronic identity verification system that allows residents as well as those with business interests in Estonia to access government services.

Kaspar Korjus, project director at e-Residency, said:

“When we started the e-Residency project a year ago, we knew we would change the way people think about their country and their citizens. Now, through the electronic voting system developed in partnership with Nasdaq, we will innovate the way businesses are governed.”

Voss also said:

“We are confident in what we are doing because distributed ledger technology has huge potential in capital markets. We have learned that it is important to build applications on distributed ledgers so that they are easy for users to understand.”

Ewout Huizingh, head of projects at ABN AMRO Clearing, said during the ICDA discussion:

“In our company, blockchain has moved out of the trade finance lab and is now ready for real-world applications.”

Huizingh said ABN Amro is closely watching the Australian Securities Exchange’s (ASX) January announcement that it had chosen U.S.-based Digital Asset Holdings to research and develop distributed ledger technology for the exchange. In February last year, the ASX said it would replace or upgrade major trading and post-trade platforms, including cash equities market clearing and settlement system Chess. A final decision on post-trade technology in Australia is expected to be made next year.

Ewout Huizingh

ASX said in a statement:

“Applying standards to regulated financial markets means that the solution will be designed differently than publicly available blockchains. The new architecture will be based on a private network and will be able to provide the same services that Chess currently provides.”

Angus Scott, head of product strategy and innovation at Euroclear, said the central securities registry is exploring how to use blockchain to streamline the settlement process.

“We are investigating how to make blockchain legally compliant and how to represent asset ownership. There also needs to be a connection between the ledger and the transfer and settlement finality of physical assets.”

Hirander Misra, founder and CEO of Global Markets Exchange Group (GMEX), said during the discussion that blockchain technology has moved from hype to real use cases. He cited an announcement last month by ICAP, which said it had successfully completed a test case that demonstrated distributed ledger technology using blockchain technology.

Hirander Misra

ICAP said its Post-Trade Risk and Information Division tested bilateral execution point/forward foreign exchange transactions by importing adapted information from multi-asset information and matching network Harmony and converting it into blockchain smart contracts in real time. The smart contracts were distributed to nine representative participant nodes on the blockchain infrastructure provided by Axoni.

In a statement yesterday, the British bank Barclays said its financial technology accelerator program had for the first time inaugurated an in-house team that had developed a blockchain-inspired model for creating financial transactions that run as smart contracts.

The statement said:

“The Barclays ‘smart contract template’ prototype is the first public demonstration of an application using R3’s Corda distributed ledger platform.”

Misra also said:

“We’re likely to end up with many different blockchains with no interoperability, or fragmentation of blockchain technology, which will kill 90 percent of blockchain companies.”

Eric Benz, co-founder and COO of Credits, said at the ICDA conference that in the next two years, there will be many blockchains, but there will be no clear winner.

Mercedes says:

“Central securities depositories and central clearing houses will have a place in the future, and there is a huge opportunity for them to provide other services.

Original article: http://marketsmedia.com/blockchain-comes-out-of-the-lab/
By Shanny Basar
Compiled by: Kyle
Source (translation): Babbitt Information (http://www.8btc.com/blockchain-comes-out-of-the-lab)