In June, Bitcoin Magazinereported that Symbiont had secured $1.25 million of seed funding from influential financial market leaders including Duncan Niederauer, former CEO of the New York Stock Exchange (NYSE). Symbiont, a fintech company focused on fostering the symbiotic relationship between traditional financial markets and cryptographic blockchain technology, was founded in March by Counterparty and MathMoney f(x) founders to create the first issuance and trading platform for smart securities based on the blockchain technology.
Now, Symbiont has issued the first Smart Securities on the Bitcoin blockchain. Symbiont’s live platform allows institutions and investors to issue, manage, trade, clear, settle and transfer a range of financial instruments more efficiently on decentralized and distributed peer-to-peer financial networks that are cryptographically secured. Initial use cases for Smart Securities include corporate debt, syndicated loans, securitized instruments and private equity.
“We are proud to be on the leading edge of this blockchain and distributed ledger movement,” said Mark Smith, CEO and co-founder of Symbiont. “With interest in distributed ledger technology growing rapidly, financial institutions are exploring how to leverage it to improve the efficiency and security of trading and processing financial transactions. Smart Securities will ultimately change the way that financial instruments are issued, managed and traded.”
According to the Symbiont press release, Smart Securities bring capital markets into the blockchain era. Smart Securities transform the way that security issuance, management, trading, and clearing and settlement take place within global capital markets. Generically known as “smart contracts,” these instruments are programmable versions of traditional securities issued on any type of distributed ledger, such as a blockchain. Once a security is issued onto the ledger, it acts autonomously, eliminating traditionally manual mid- and back-office functions.
Symbiont’s platform allows market participants to create digital, programmable versions of securities. The company hopes the development of programmable securities, and their availability in one global, decentralized peer-to-peer network, will increase efficiency and transparency and lower the cost of issuing, trading, settling and clearing securities.
Symbiont isn’t the only company trying to revolutionize the stock markets with the blockchain technology. Nasdaq, a prestigious stock exchange and leading financial institution, is leveraging blockchain technology as part of an enterprise-wide initiative.
In June, Nasdaq announced a partnership with San Francisco-based Bitcoin API startup Chain to implement the first blockchain technology pilot projects in Nasdaq Private Market, a recently launched marketplace that handles pre-IPO trading among private companies. Nasdaq Private Market is not a stock exchange open to the public, but a service that connects private companies with investors. However, Nasdaq stated that the blockchain initiative could ultimately be extended to record trades of stocks in public firms listed on its exchange.
Also in June, Overstock announced the first crypto-securities to be offered on the blockchain.
“We have started building things that replace what Wall Street does,” said Overstock CEO Patrick Byrne. “It does them far cheaper, and with far more transparency, and without any of the opportunity for rigging.”
Overstock’s platform, dubbed t0.com, can augment other trading exchanges and power financial transactions. Overstock filed a registration with the Securities and Exchange Commission seeking permission to issue public crypto-stock, and purchased a stake in stock brokerage firm Pro Securities, whose technology will power the crypto-stock exchange.