Nasdaq made its biggest investment in the corporate blockchain industry, leading a $ 20 million series of investments in Symbiont, a start-up working to bring new types of blockchain-held assets to widespread adoption. The investment, which also includes Citi Ventures, Galaxy Digital and Raptor Group, marks the latest escalation of stiff competition among traditional exchanges seeking to take advantage of technology that was once considered an existential threat. Instead of being intimidated by blockchain technology, which, like Bitcoin, offers counterparties the ability to generate value without going through trusted third parties such as stock exchanges like Nasdaq and others collaborating with these companies. As part of its current investment, Nasdaq also announced a commercial integration that would allow the company, which manages 26 stock exchanges, options, bonds, derivatives and commodities in the United States, Scandinavia, the region. Baltic Sea, Armenia, and others, to expand into new areas.
Nasdaq Blockchain Strategy
Nasdaq believes there is great potential across the financial services industry to leverage blockchain, particularly in areas where tracking and transfers of possession of digitized assets on a peer-to-peer basis is relevant. As an immutable record of ownership, blockchain could create greater efficiency and transparency in position-keeping and reconciliation and on the settlement side, the technology could enable several services including managing payments and cash, transferring securities, facilitating collateral and tri-party arrangements, and securities lending. Additionally, we believe that distributed ledger technologies can already be used for more efficient sharing of information between central operators and participants to reduce reconciliation issues, including provisioning of a richer set of information compared to existing ISO standards used today. And, since blockchain is ideal for tracking and tracing, it could improve auditing and regulatory reporting both from a quality and efficiency standpoint.
Having launched the first all-electronic stock exchange in 1971, Nasdaq was built on a foundation of innovation and market disruption. This heritage continues to fuel our ambition. As a financial technology leader, they are committed to the further development of global markets through a broad exploration of innovative technologies – like cloud, machine intelligence and blockchain — that advances our clients’ abilities to achieve ambitions.
As an immutable record of ownership, blockchain could create greater efficiency and transparency in position keeping and reconciliation and on the settlement side, the technology could enable several services including managing payments and cash, transferring securities, facilitating collateral and tri-party arrangements, and securities lending. Also, since blockchain is ideal for tracking and tracing, it could improve auditing and regulatory reporting both from both a quality and efficiency standpoint.
In August 2017, Nasdaq and SIX Swiss Exchange announced development of a joint prototype to integrate blockchain into the SIX bilateral market for managing structured products, with the goal of gaining efficiencies in post-trade processing.
While Nasdaq has recognized many opportunities for blockchain projects internally, they still continue to identify more opportunities through, Nasdaq Ventures. The program is a global venture investing platform focused on cultivating talent and technology advancement within financial services and spurring innovation that ensures Nasdaq’s technology and services are at the forefront of the industry. Blockchain continues to be a focus for the group and applications are encouraged within this space.
The investment in Series B brings the total amount raised by Symbiont to $ 36 million, with previous investors, including Fenbushi Capital and Medici Ventures, the blockchain investment arm of Overstock.com. This is the first investment in Symbiont for each of the Series B investors. The terms of the investment are not disclosed. This investment comes at a time when major cryptocurrency companies are downsizing after the catastrophic fall in prices last year. Most of the money will be spent moving from WeWork’s offices to the famous Wall Street bull statue, the company’s headquarters for the past five years, and hiring new blockchain engineers. Symbiont has experienced rapid growth recently, doubling its workforce to 30 employees in 2017 and doubling as it exited 2018. Although it quite unexpected that the growth rate would continue, but most of the recent investments will be dedicated to new hires.
Money To Be Spent On Upscaling Operations
Part of the money is going to be spent on growing its team, according to company representatives. Unlike public blockchains like Bitcoin and Ethereum that everyone can rely on, and the authorized blockchains developed by IBM, R3, and others and distributed to the open source community, Symbiont’s blockchain and smart contract solution, Assembly, has been built early. Assembly allows users to issue and issue traditional values, what they refer to as “smart instruments,” and acts as the sole custodian of assets. By integrating with the Nasdaq financial framework for the creation of financial applications, the Assembly will assist the exchange in streamlining the research, execution and liquidity process.
Nasdaq Looking Into The Future
Nasdaq’s start-ups and large customers, as well as other Symbiont partners, can then use Assembly to create solutions for a large number of markets, including the symbolic ownership of real estate and works of art, which would constitute new business areas for Nasdaq. It is important to note that the commercial integration between the Symbiont Assembly and NFF is not exclusive. Both companies are free to work with competitors. Symbiont’s current customers include Vanguard and Ranieri Solutions, led by Lewis Ranieri.
Symbiont has also played a crucial role in helping the state of Delaware to adopt a number of new measures designed to give companies the assurance that the shares they issue on a chain of channels will be legally recognized. While the new Delaware administration has largely revolved from its original plan and is now working with IBM on an alternative, it was recently revealed that former Delaware governor Jack Markell now sits on the board of Symbiont. The new administration has adopted a wait-and-see approach. Nasdaq and Citi had already invested in the blockchain start-up chain, a potential Symbiont competitor, acquired by the Stellar Development Foundation, the organization behind the Lumen (XLM) cryptocurrency, currently valued at $ 2 billion.