The recently founded Sydney Stock Exchange is turning to blockchain technology in developing a settlement system that will see it provide an open blockchain settlement platform, enabling any company or broker to use the blockchain.
The Sydney Stock Exchange (SSX is building a blockchain solution for the private equity market in an effort to provide a low-cost alternative for venture capital funds. A report from the Sydney Morning Herald reveals that the blockchain-based solution will see the settlement of trades in private companies to begin with. With regulatory approval, the system will also be used for publicly listed stocks, as well.
The blockchain solution is being built with the aid of consultants at Bit Trade Labs and will aim to facilitate instantaneous settlements for small commodities exchanges, a task which would otherwise see settlement times of up to a month.
The project has been in the works for a year, and SSX has accelerated the development with the Australian government pushing for competition in the industry.
Speaking to the publication, Loretta Joseph, SSX’s chief consultant on the project stated:
We will start with a private secondary equity market for venture capital and crowdfunded startups to register on our exchange. We will then move to a public secondary market. VC and crowdfunding are private little markets. It will give them another market that they can come to.
Notably, the SSX blockchain in development will be a public distributed ledger, like the Bitcoin blockchain. The open-standard will enable any company or broker to use the SSX blockchain.
This is in contrast to the ASX-Digital Asset blockchain which remains a private blockchain, geared toward a specific number of participants. Banks are also among the proponents for the private blockchain with their most obvious endeavor being the R3-led private blockchain effort which sees a consortium of the world’s biggest banks.
Joseph makes the case for the innovation of a public blockchain supported by miners, in stating:
The banks [and the ASX] are effectively trying to build an intranet. If we put a control around who would come into [the internet] and who can’t, we wouldn’t have the internet today.
The two-year-old stock exchange was formerly known as Asia Pacific Exchange and currently provides a platform for small stocks.
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