Nasdaq CEO Foresees Reduced Settlement Cycles With Blockchain Technology

On October 10, 2017, Nasdaq president and CEO Adena Friedman delivered a keynote speech at Georgetown University’s Financial Markets Quality Conference 2017. In her remarks, Friedman reportedly addressed token offerings (ICOs) and blockchain technology implementations.

“There is no standard for disclosure,” she said of token offerings, according to Deal Street Asia. Friedman added, “There are no protections for investors. There’s no ownership.”

Friedman called token offerings a “bleeding edge type of construct,” explaining that “Nasdaq doesn’t tend to get engaged in the bleeding edge.” Instead, the exchange prefers the realm of tried-and-true financial constructs, she offered.

While Friedman seemed doubtful about the reliability and financial security of token offerings, she expressed her belief that blockchain technology could help reduce settlement periods. According to the Securities Industry and Financial Markets Association, the Nasdaq CEO made note of the “huge” regulatory component to using blockchain-based systems for public markets, but she foresaw significant developments across central securities depositories and central counterparty clearing houses.

Also on Tuesday, Nasdaq Stockholm announced that two Ether exchange-traded notes have been made available to the public.

In May 2017, Nasdaq and Citi announced a payment solution that “enables straight through payment processing and automates reconciliation by using a distributed ledger to record and transmit payment instructions.” At the time, Friedman said the integration of blockchain technology and global financial systems could “have profound implications for outdated administrative functions in the capital markets.”

In April 2017, the exchange invested in blockchain technology through the launch of Nasdaq Ventures. But Nasdaq has been working on blockchain technology since at least 2015, when it announced that used the exchange’s Linq blockchain to complete and record a private securities transaction.

With a market capitalization of approximately $6.8 trillion, Nasdaq could have a massive impact on the eventual adoption of blockchain-based trade. A few of our readers might remember when Nasdaq became the world’s first electronic stock market back in 1971. One day, maybe Nasdaq could become the world’s first blockchain-based stock market.

Matthew is a writer with a passion for emerging technology. Prior to joining ETHNews, he interned for the U.S. Securities and Exchange Commission as well as the OECD. He graduated cum laude from Georgetown University where he studied international economics. In his spare time, Matthew loves playing basketball and listening to podcasts. He currently lives in Los Angeles. Matthew is a full-time staff writer for ETHNews.
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