On April 29, 2020, tech-heavy stock exchange Nasdaq, through a partnership with R3, announced it would use the Corda ecosystem to create marketplaces for the issuance, trading, settlement, and management of digital assets.
R3 is an enterprise blockchain technology company that delivers Corda, a next-generation platform powered by industry-leading distributed ledger technology.
Nasdaq will integrate R3 tech into its financial framework, which it will use alongside other capital markets grade tools, including matching systems, datacasting, surveillance, and post-trade software.
Commenting on the partnership, Johan Toll, head of digital assets for market technology at Nasdaq, stated:
“This collaboration between Nasdaq and R3 is another important milestone in Nasdaq’s continuous development of technologies that support the creation and growth of dynamic, trusted digital asset marketplaces.”
Johan added that R3’s Corda platform would fit well into Nasdaq’s technology ecosystem and partnership strategy and allow the exchange to harness the power of scalable design and a new level of interoperability.
Nasdaq is already providing its trading market infrastructure to various digital currency exchanges, along with clearinghouses, central securities depositories, and regulators.
For example, Singapore Exchange SGX is a Nasdaq client, and together they’ve run experiments for instant settlement or delivery versus payment for tokenized digital assets.
Traditional Market Players Are Embracing Digital Assets
According to R3’s chief revenue officer, Cathy Minter, traditional financial institutions around the world are becoming more aware and open to the potentials of digital assets.
She believes the Nasdaq and R3-powered platform will provide a safe, reliable and regulated environment to accommodate these digital assets for participants in the capital markets.
Nasdaq’s move to collaborate with R3 is part of the exchange’s attempts to redesign itself as a tech stock market since the massive decline in market volumes. The partnership will significantly increase Nasdaq’s efforts in helping digital asset exchanges to improve transaction transparency to match the same level found in the capital markets.
Meanwhile, R3’s Corda is also being used by major market players. Recently, SBI Holdings, a Japanese financial services giant, tapped the R3 Corda blockchain infrastructure for sharing transaction history with its forex trader.
Nasdaq Exchange Has Been Bullish On Digital Assets Lately
In January 2019, Nasdaq partnered with cryptocurrency exchanges that wanted to improve their transparency standards. Nasdaq utilized its sophisticated surveillance tech designed to scan transactions and identify fraudulent patterns on crypto exchanges.
The crypto exchanges were expected to pass a Nasdaq-prepared examination to qualify for a collaboration with the stock market. Only seven exchanges, including Gemini and SBI Virtual Currency, were able to pass the test.
Moreover, in Feb. 2019, the tech-heavy stock market unveiled the addition of a Bitcoin Liquid Index (BLX) and Ethereum Liquid Index (ELX) to its trading services.