Canadian Securities Exchange To Use Blockchain for New Clearing Platform

The Canadian Securities Exchange is to use blockchain-based technologies for its new clearing and settlement platform, in one of the first moves of its kind by a major exchange.

The platform will be used for providing clearing and settlement for token sales, and will allow the exchange to list security token offerings — explicit securities, driven by blockchain tokens.

The move to launch the new exchange opens up a fresh market for the Canadian Securities Exchange, operational since 2003, as well as providing companies with a mechanism for issuing tokens as securities when raising capital through their exchange.

The exchange will enable companies to raise capital by issuing equity and debt, in the form of blockchain tokens, a process that occurs in a fully regulated environment.

While sharing many similarities with ICOs, the fact that the tokens in the Canadian Securities Exchange case are explicitly regulated as securities gives the new exchange a distinct market position.

Richard Carleton, the CEO of the Canadian Securities Exchange, said the new platform will provide companies with a broader range of options for raising capital from investors.

“Our platform represents an intersection between blockchain and the capital markets that delivers on blockchain’s promise to disrupt conventional transaction and record-keeping mechanisms, thereby providing tangible benefits for market stakeholders.

“By harnessing this technology, the potential exists to extend corporate finance beyond the limits of traditional equity and debt offerings.”

The exchange is already in negotiations around its first listing, with 3D printing firm Kabuni thought to have agreed to a memorandum of understanding ahead of a prospective launch on the platform.

Kabuni is already in licensing talks with the British Columbia Securities Exchange for permission to issue tokens as a security, which will see them become the debut company to list their securities on the new Canadian Stock Exchange platform.

The platform will be powered by technology from New York-based Fundamental Interactions Inc., a firm specializing in developing technologies for financial trading applications.

Analysts will be watching closely to see whether the new platform proves a success, with potential implications for exchanges, and for companies, further afield.

By bringing ICOs into the regulated environment, the Canadian Securities Exchange could well be at the head of a trend toward more regulated token exchanges worldwide.