Nasdaq and R3 To Create 'Digital Assets Exchange' Platform

Global stock exchange? Nasdaq, and Enterprise blockchain? developer R3, have announced that they have co-signed a “long-term, non-exclusive, collaboration agreement” which will see the two companies joining forces to create a new service platform for digital asset exchanges to be built upon.

According to a press release, Nasdaq will be integrating R3’s enterprise-standard Corda technology into its ‘Market Technology’ business, with R3 additionally providing “professional services and support” with regards to “building full lifecycle solutions for digital assets marketplaces”.

Nasdaq specified that it will be utilising:

“Corda Enterprise to manage the complete asset lifecycle for new and existing market infrastructure operations on a 24*7*365 basis”.

Nasdaq, Digital Assets, and Institutionalisation

This wouldn’t be the first instance that Nasdaq has dipped its toes into research and development pertaining to digital assets. On the same day that the press release was made public (28th April 2020) an article was published on the Nasdaq website, featuring an interview with the company’s Head of Digital Assets within its market technology division: Johan Toll.

In this interview Johan Toll positioned the partnership, and forthcoming platform for digital asset exchanges, as a progressive step towards the so-called ‘institutionalisation’ of digital assets; following on from “numerous projects and proof-of-concepts embracing distributed ledger technologies”. Toll stated that these projects had been taking place “since the mid-2010s”.

“Overall, our goal is to provide financial institutions with an easily accessible, complete solution to issue tokens and build trusted, digital asset marketplaces designed for high security for trading and settling them within an ecosystem that supports growing volumes, as well as business and product development.”

The ‘Market Technology’ business is one of Nasdaq’s four income streams (the other three are ‘Market Services’. ‘Corporate Services’, and ‘Information Services’). Nasdaq claims that the technology which this division has developed powers “more than 250 of the world’s infrastructure organisations, regulators and market participants in 50+ countries.

Although ‘Market Technology’ comprised the smallest share of the organisation’s annual revenue in 2019 out of all four business areas (8%), Nasdaq had high hopes and predicted a doubling in revenue over the next five year. Note that this prediction appeared in a report published back in February: before the pandemic level of COVID19, which has rocked markets significantly.

R3’s Corda Attracts Institutional and Financial Partnerships

“Together with Nasdaq we will provide a world-class platform on which digital asset markets can be built.” - Cathy Minter (Chief Revenue Officer, - R3)

R3 is the company responsible for creating and maintaining the blockchain? platform powering ‘Corda’ and ‘Corda Enterprise’, and describes itself as an enterprise blockchain? firm. This platform specialises in enabling the development and distribution of / client access to dApps, of which there is a diverse library.

Whilst Corda is targeted at clients and users from a wide range of industries, a large number of its active participants are within the finance sector. Also, there is also a growing trend of trading-based companies being onboarded to Corda recently, beyond Nasdaq.

For example: SBI Liquidity? Market is a Japanese forex trading focused business, as well as being an official partner to Ripple. Instead of making use of the Ripple-backed Hyperledger platform, SBI announced earlier this month that it would be developing a blockchain? implementation of a forex confirmation system on the R3 Corda platform (in partnership with another Japanese company called CAC Co., Ltd.

Corda has amassed a large portfolio of high profile institutional partners and clients - including: Microsoft, Accenture, Amazon Web Services, Worldpay, and Wells Fargo. In total, the Corda ecosystem boasts over 300 ‘participants’ from a wide range of industries “from both the private and public sectors”. As such, it is observably an actor working proactively towards supporting institutional use of blockchain?.