Blockchain may be ready for primetime use on some of the world’s largest stock exchanges, but that doesn’t mean integrating the technology in financial systems will be an easy ride.
At the London Blockchain Summit on Oct. 31, Nasdaq Clearing’s recently promoted head of product development, Gustaf von Boisman, addressed this gap, highlighting how the technology’s current capabilities aren’t necessarily yielding quick implementations. As such, the talk served to illustrate how even widely anticipated use cases are struggling to graduate from the laboratory.
For instance, in a notable example, von Boisman said that, while blockchains are capable of reducing settlement times down to real-time speeds, activating such a system within the framework of the financial industry could prove more complicated.
Von Boiseman pointed to several exchanges – including the Saudi Arabia Stock Exchange and the Moscow Stock Exchange – as companies that reached the coveted T+0 (same-day) settlement times with technology, only to return to slower settlements after being criticized for the requirements such speed demanded.
This contributed to what von Boisman called a lack of “harmonization” that can result from rapid changes, something Nasdaq wants to steer clear of – especially as it experiments with blockchain technology.
He told the audience:
“We’re confident that the technology can do the job, and that comes back to how settlement can happen. It’s more of a choice of market than a technological choice.”
His comments might seem surprising given Nasdaq’s pursuit of T+0 trading, and its current interest in blockchain, including work with advertising platform NYIAX, Swiss stock exchange SIX and, announced recently, Swedish bank SEB.
But right now, to avoid past problems, von Boisman advocated that enterprises should look to break down the blockchain use cases that can modernize financial systems into smaller step goals.
“That’s sort of the way we’re looking at this, finding opportunities where we can look at the settlement of a particular use case and find what is the best for this particular implementation,” Von Boisman concluded.
Nasdaq image via Shutterstock