Nasdaq will pilot the project in Nasdaq Private Market, which launched in January 2014 to handle pre-IPO trading among private companies. One test of the pilot could be to encrypted, digital representations of share certificates, insert them into minute bitcoin transactions and facilitating an immediate, verifiable transfer of stock ownership from seller to buyer.
Nasdaq OMX Group Inc. is testing a new use of the technology that underpins the digital currency bitcoin, in a bid to transform the trading of shares in private companies. The experiment joins a slew of financial-industry forays into bitcoin-related technology. If the effort is deemed successful, Nasdaq wants to use so-called blockchain technology in its stock market, one of the world’s largest, and potentially shake up systems that have facilitated the trading of financial assets for decades. “Utilizing the blockchain is a natural digital evolution for managing physical securities,” said Nasdaq Chief Executive Robert Greifeld. He said the technology holds the potential to “benefit not only our clients, but the broader global capital markets.”