Rise in Blockchain Activity across Stock Exchanges

Stock exchanges across the world are rapidly building and exploring Blockchain Technology to lower risks, tighten security, improve costs and efficiency.  The number of exchanges signing up to be part of this revolution is extraordinary, with some markets already utilising BCTech.  We take a look at developments in a variety global markets, large and small:

U.K. – LONDON STOCK EXCHANGE   / ITALY – BORSA ITALIANA 

July 2017 – The London Stock Exchange (LSE) partnered with tech giant IBM and are working on a major project, meaning the UK looks set to adopt blockchain in a significant way.   The platform is being developed to digitally issue private shares of small and medium enterprises. Digitising these records onto the blockchain will increase efficiency in tracking shareholder information of unlisted businesses, currently the database systems for SME (small and medium-sized enterprise) shareholder information, is largely stored on spreadsheets and physical paper records.  The aim is to create transparency between a company and its shareholders.  The project is currently being built in Italy with LSE’s Italian exchan ge operator Borsa Italiana.

U.S. – NASDAQ 
May 2015 – US stock exchange Nasdaq leads the way in adopting the blockchain, beginning with the launch of Linq, a blockchain private-trading platform that allows companies not listed on a stock exchange to digitally represent their share ownership.  Since then, by partnering with Chain they have successfully completed a private-securities transaction to a private investor.

“The potential to enable stock exchanges to significantly reduce the cost, complexity, and increase the speed of trading and settlement processes in a secure manner, has the biggest names in the industry exploring blockchain technology. The path to its adoption will require resolving issues such as scalability, common standards, regulation, and legislation.”   Nasdaq

SWEDEN 
2017 – Nasdaq teamed up with leading Swedish bank SEB to test a mutual-fund trading platform.  The shared digital ledger is used to record all transactions in real-time, allowing instantly visible changes and updates to trades that are made.  This will be a dynamic change for the Swedish fund market, where currently tracking the buying and selling of funds is an archaic process, with physical paper still largely required in the overall process.

  
Swedish Bank SEB  teams up with Nasdaq

ESTONIA – TALLIN (aka. The Nasdaq Tallinn) 
2017,  the Baltic country’s only regulated secondary securities market completed the testing phase of using Blockchain tech to run proxy voting on the exchange.  The project allows investors who own shares of companies that are listed on the Nasdaq Tallinn to either cast their votes or shift their voting rights onto a proxy, significantly streamlining the voting process at an investor meeting, with the hope of encouraging investor participation in annual general meetings.

FRANCE – EURONEX (PARIS) 
December 2017 – The French government open the way for Paris to become the first of the European stock exchanges to allow trading of unlisted securities using blockchain digital ledgers, this came with the adoption of new rules aimed at improving Paris’ image as a center for financial innovation.

GERMANY – DEUTSCHE BORSE 
November 2016 – Deutsche Börse Group, one of the largest exchange organisations worldwide, presented their first functional prototype for the blockchain technology based settlement of securities. Headquartered in Frankfurt, the German financial giant’s business covers the whole process chain, from securities and derivatives trading, to clearing, settlement and custody. So it is no surprise that they are continually developing in this area and are one of the key investors of Digital Asset Holdings, a blockchain company.

 “Like many other companies, at the beginning we analysed the potential of bitcoin and quickly realised the relevance of the technology underlying bitcoin.”  Heiner Seidel – Deutsche Börse Group

RUSSIA  – MOEX 
The Moscow Exchange have developed a blockchain-based e-voting system for bondholders at its National Settlement Depository.  The project is designed to provide investors with greater reassurance that votes are properly counted and securely recorded.  Furthermore, regulators will be able to trace the data.  The hope is that this will engender the trust of foreign investors and could improve the reputation of Russia’s stock exchange significantly.

AUSTRALIA – ASX 
2016 – The Australian Securities Exchange (ASX) partnered with Digital Asset Holdings, purchasing 5 percent equity in the start-up company to develop a new Blockchain solution for the clearing and settlement of trades.   It is important to note that the ASX earns around 10 percent of its revenue from the Clearing House Electronic Subregister System (CHESS), the post-trade settlement process.   The new technology would replace this completely, thus creating simplicity and improving speed.

CHILE – SANTIAGO STOCK EXCHANGE 
May 2017 –  Chile’s Santiago Stock Exchange (SSE) signs an agreement with IBM to become the first Latin American stock market to apply IBM blockchain technology within its short-selling system for securities lending.  In this bold agreement, SSE intend to benefiting from the technology’s ability to reduce errors, potential occurrences of fraud.  Furthermore, the technology will save substantial amounts of time for the Santiago Exchange’s back-office processes, improving transaction management and lowering costs.

JAPAN – JPX  
January 2017 – Japan’s Financial Services Agency increases permissions for the Japan Exchange Group (JPX) to use blockchain as its core trading infrastructure.  JPX is responsible for operating the Tokyo Stock Exchange and continues to make groundbreaking decisions around all areas of fintec.  Indeed, Japan’s push to ensure their not being late for the fintech revolution, may in fact see them turn up at the front of it.

MYANMAR – YANGON STOCK EXCHANGE
2016 – In an attempt to create one of the world’s first stock exchanges to publicly trade stocks on a blockchain-based exchange, Japanese brokerage Daiwa Securities began working with the Yangon Stock Exchange (YSE).  The plan is to integrate Daiwa’s equity trading into the Yangon Exchange platform, both entities are currently in talks with the Myanmar government in the hope of launching the blockchain-based exchange later this year.

Almost all markets throughout the world are now avidly embracing Blockchain Technology.  The financial industry could be set to dramatically transform.