Nasdaq is open to becoming cryptocurrency-exchange
On June 19, a press release was published stating that the blockchain-based Proof-of-Concept (PoC) providing an effective solution for securing securities 24/7 was successfully tested by the stock exchange operator Nasdaq.
The new blockchain platform has been collectively advanced by Nasdaq, ABN AMRO Clearing, EuroCCP, and Euroclear. This platform directs to address the issues facing Central Counterparties (CCPs) when it comes to making margin calls after stock exchange trading hours are over. If an investor who owns a brokerage account in the marginal company needs to make additional funds to meet the maintenance margin, margin calls are made.
EuroCCP CEO Diana Chen says that in the current system, the protection of counterparty risks for transactions with the fund does not meet the criteria for the global market infrastructures. Derivation of derivative instruments must comply with the European Market Infrastructure Regulations, and as a result, clearing members and CCPs pass through obstacles when it comes to making margin calls and ensuring the transfer of collateral in several time zones.
The new blockchain PoC showed successful results. Now a joint stable network can be built between collateral givers, collateral takers, and intermediaries and in this network, the parties can ‘’handle the margin call, the securities collateral delivery and the return process within minutes.’’
Coen van Walbeek, Global Head of Treasury and SBL at ABN AMRO Clearing shared his opinion that PoC is ‘’a breakthrough for the CCP model’’ with the head of Nasdaq Clearing. He also noted that the project shows an excellent example of the potential of blockchain technology to transform markets around the world. Nasdaq's partners are among the world's leading financial firms. For example, Euroclear is constantly included in the top 3 best clearing houses in most time zones and EuroCCP has access to 82 % of shares committed on 26 trading platforms.
Earlier this month, Nasdaq's CEO Adena Friedman made a statement that in the future, blockchain technology could affect massive inefficiencies in private equity markets and if we consider this technology for the long term it can be quite devastating. In April, the CEO said that if normative clarity will be achieved over time, Nasdaq will consider the possibility of crypto-exchange.
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