Blockchain technology was thoroughly discussed at the London Blockchain Summit which commenced on 31st October. Among the people who talked about the up-and-coming technology was Gustaf von Boisman, who is the recently appointed Head of Product Development at Nasdaq Clearing. He stated that the innovative technology is ready to be introduced to the international stock exchanges, however, the implementation process is most likely not going to be an easy one.
In its essence, the blockchain technology could be defined as a flexible structure and it encourages the individuality and the independence of the chains involved in it. In this case, however, when a real-world established structure is aiming to implement it, the successful introduction might prove to be a tough task. Financial systems could potentially benefit from the philosophy behind the blockchain technology, but as it was highlighted by the Head of Product Development it does not guarantee a fast-paced implementation process.
During his presentation, Mr. von Boisman made clear his position that many people place their hopes in the developing technology and they give freedom to their creative potential, while in reality many of those anticipated use cases do not cross the line of the laboratories and enter the real world. One such example of unfortunate turn of events for a promising idea, as reminded by the speaker, has been the incapability of rapid activation o the system.
Even though the blockchain technology has the potential to minimize the settlement time and reduce it to a real-time speed, the introduction of this kind of system to the already established and roaring financial industry will most probably turn out being a more complicated project. Among the examples, Mr. von Boiseman noted during his talk were several exchanges, among which the Saudi Arabia Stock Exchange as well as the Moscow Stock Exchange.
Moscow Stock Exchange’s Experience with Blockchain Technology
Those financial entities have been used as an example that reaching the desired by many T+0, also known as same-day settlement time with technology. This meant that the participants had to deposit 100 percent of the cash and securities in advance. International investor reacted negatively to the system, since the mutually accepted settlement is T+3, meaning that the delivery of securities takes three days to be finished. It had been later observed that the companies using the same-day technologies have returned to the relatively slower settlements, following a wave of criticism for the numerous demands which
The so-called fail to harmonize all parties involved in the process could potentially result in unwanted and easily avoidable changes, which is a thing Nasdaq needs to distance itself from. As it was stated blockchain has the capability to perform the tasks given, the only thing which needs to be finely tuned is they way settlements are arranged so that all parties involved benefit.
Even though at the moment Nasdaq is pursuing a T+0 trading and it researches blockchain implementation through the advertising platform NYIAX, Swiss stock exchange SIX, and Swedish bank SEB, Mr. von Boisman advised that the company sets more realistic goals.