Nasdaq Partners with Chain to Provide Blockchain Technology

Leading securities exchange The Nasdaq OMX Group, Inc. NDAQ has entered into a partnership with one of the foremost blockchain infrastructure providers – Chain. This deal will make digital ledger technology available to private companies that issue and transfer shares on the Nasdaq Private Market.

A blockchain is a public ledger of all Bitcoin transactions that have ever been executed. With this technology it will now be easier for private companies to keep track of the shares they issue and settle transactions with on Nasdaq. Also, Chain will be the first to utilize the blockchain technology to manage its shares when this service becomes available later this year.

With the help of blockchain, stockholders will be able to transfer securities effortlessly between companies and their affiliates. Additionally, they will be able to maintain a complete historical record of the transactions. Moreover, the blockchain technology will offer efficient and fully-electronic services that will facilitate the issuance, transfer, and management of private company securities. This will improve the security of the transactions made as well as reduce time, costs, and points of friction across the capital markets.

This partnership also marks an important step by Nasdaq to apply blockchain technology. In May, the securities exchange had announced leveraging a colored coin innovation based on blockchain technology – Open Assets Protocol, which is likely to be launched later this year. The technology will be used to expand and enhance the equity management capabilities offered by the Nasdaq Private Market platform.

The aforesaid offering is expected to modernize, streamline and secure the cumbersome administrative functions of private companies. The offering will also simplify the challenges faced by these companies with respect to manual ledger record-keeping.

Currently, Nasdaq carries a Zacks Rank #3 (Hold). Better-ranked stocks from the same space include Euronet Worldwide, Inc. EEFT, MarketAxess Holdings Inc. MKTX and Blackhawk Network Holdings, Inc. HAWK. While Euronet Worldwide sports a Zacks Rank #1 (Strong Buy), both MarketAxess Holdings and Blackhawk Network hold a Zacks Rank #2 (Buy).

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