February 17, 2016
All companies have been recently thinking about blockchain in one or another way. Some even went from thinking to testing. Today, the professional community made another step towards blockchain adoption as IBM and Japan Exchange Group ran a proof-of-concept blockchain test.
IBM will be working with JPX to jointly evaluate how the IBM open-source blockchain code—that has been proposed to the Linux Foundation's Hyperledger Project—could be used for trading and settlement in low liquidity markets. As the Hyperledger Project evolves, the joint IBM and JPX evaluation work will transition to use of the code produced by that effort.
Atsushi Santo, Head of New Business Development, Japan Exchange Group, shared in the official press release, "Blockchain is one of the emerging technologies that is being closely watched by financial communities throughout the world. We plan to explore blockchain fabric to evaluate technical limitations and the potential of blockchain for post-trading service for low-volume traffic by fully utilizing IBM global resources including IBM Research, Tokyo."
IBM is one of the leaders when it comes to blockchain as the company has more than 20 years of experience in the open-source movement and thousands of developers certified to engage in open source development.
Currently, IBM participates in and contributes to more than 150 open-source projects, which include Spark, OpenStack, Cloud Foundry, Open Contain Project, Node.js, CouchDb, Linux, Eclipse and an already established relationship with Apache.
As mentioned before, IBM has also offered its IBM blockchain code to the Linux Foundation Hyperledger Project. The Linux Foundation Project has been an important step for participating companies towards open ledger. In December last year, the Linux Foundation—a nonprofit organization enabling mass innovation through open source—announced a new collaborative effort of the financial and tech industries giants to advance the blockchain technology called the Open Ledger Project. The project is aimed to develop an enterprise-grade, open-source distributed ledger framework and free developers to focus on building robust, industry-specific applications, platforms and hardware systems to support business transactions, as stated in the official press release.
Aside from IBM and Linux, there are also other players testing blockchain technology. Nasdaq has two official blockchain projects, one of which was revealed just couple days ago.
On February 12, Nasdaq and the Republic of Estonia announced that Estonia’s e-Residency platform will be facilitating a blockchain-based e-voting service to allow shareholders of companies listed on Nasdaq’s Tallinn Stock Exchange, Estonia’s only regulated securities market, to vote in shareholder meetings. The country’s e-Residency platform is an electronic identity system used by both Estonian residents and those with business interests in the country to access government services through e-Residency digital authentication.
The program marks the second official blockchain project Nasdaq is executing after successfully delivering the private securities issuance between an investor and a company via Nasdaq Linq, its blockchain-enabled platform.
Blockchain ledger technology, Linq, was able to successfully complete and record a private securities transaction – the first of its kind using blockchain technology. Blockchain startup Chain documented the issuance of shares to a private investor using Nasdaq’s blockchain-enabled technology.
This blockchain-based transaction by Chain signifies a proof-of-concept and a major step forward in the use of blockchain technology, as Nasdaq stated. In September 2015, Nasdaq along with Visa, Citi and others invested $30 million in Chain.
The issuer of private securities was able to digitally represent a record of ownership using Nasdaq Linq. Needless to say, it significantly cut the settlement time and made any paper stock certificates redundant. Moreover, Linq enables issuers and investors to complete and execute subscription documents online.
Australia isn’t falling behind in terms of blockchain adoption as a team of computer engineers from the Commonwealth Bank of Australia have recently built a working blockchain in their innovation lab in Sydney which will be used to show regulators how blockchain might be used to reduce risk and costs of making international payments or other applications. Many banks feel they can reduce, or eliminate altogether, various costs by adopting some sort of common shared ledger and let that proliferate through the industry, commented Tim Swanson, Head of Market Research at R3 CEV. He also added that the technology could also assist regulatory monitoring for systemic risks in financial markets. It is possible that by easing the way for blockchain adoption with regulators, the Commonwealth Bank is looking to pave its own way with blockchain technology.