Judd Bagley, the company’s communications director, announced the company plans to move forward at the Money20/20 conference in Las Vegas, emphasizing T0’s advantages over traditional equities trading systems.
Bagley said Overstock, unlike other innovators, is not going to hold back in the area of fintech innovation. He noted the company, being from Utah, is taking a “burn it down and start over” approach.
Technically Not A Stock Exchange
He noted that T0 cannot be called a stock exchange for regulatory reasons. Instead, it is a platform for trading widgets. The first use case will be for stocks and bonds.
He specifically said T0 would be in operation sometime this year, not that the stock trading would begin on T0. He hinted at a Tuesday morning announcement on Overstock.com.
Overstock Learned From Experience
A few years ago, the company suffered some stock market manipulation. It discovered that the problem came from the complexity of settling trades, a process involving intermediaries. The complexity involves vulnerabilities, including taking three days to fully settle trades.
Emmanuel Aidoo, who oversees blockchain strategy and cryptocurrency at Credit Suisse, said during the panel in Las Vegas that trades should not take three days in the modern age.
Blockchain-based equities transactions can complete in 10 minutes.
NASDAQ Official Disputes Claim
Yolanda Goettsch, a vice president and associate general counsel at NASDAQ, countered that markets are very liquid and efficient. She noted the speed of the exchange’s electronic trading. She did acknowledge it takes three days to complete settlement to validate the parties have the funds, the rights to the stock and are meeting requirements.
The panelists agreed banks and exchanges can and should take blockchain seriously.
Jacob Farber, general counsel for R3, a consortium of 75 financial institutions building an open-source platform for distributed ledgers called Corda, said everyone in financial services is testing blockchain technologies.
Images from Shutterstock.