Overstock Unveils Highly Anticipated Blockchain Equity Trading Platform
Overstock's chairman and CEO Patrick Byrne has formally announced the launch of T0, the firm's much anticipated blockchain-powered private and public equities trading platform.
Speaking at the Nasdaq stock exchange headquarters in New York, Byrne said that T0, a subsidiary of Overstock, has concluded a partnership with the Industrial and Commercial of Bank of China (ICBC), the world's largest bank, to test the platform. Five other unidentified banks have also agreed to test it, he said.
The platform is using Peernova's blockchain technology to allow pension and other stock holders to lend shares directly to hedge funds and other traders, removing middlemen such as agent lenders and prime brokers from the process.
Designed to conduct instantaneous transactions, T0's trade settlement platform could save 80 to 90% on systemic costs, according to Byrne.
The technology uses "Pre-Borrow Assurance Tokens" (PATs), or digital tokens that allow stock holders to closely track each transaction involving their loaned stock. Additionally, Byrne stressed that T0 is ledger agnostic and can work with any decentralized ledger.
Ultimately, Byrne wishes that his platform will replace the primary stock markets and reinvent the way Wall Street does business.
"We’re taking a market that’s in the dark and we’re putting it on an exchange," he said.
"It’s good for the buyer, it’s good for the seller, it makes the regulator’s job easier. It’s not good for one group of people, and you can figure out who that is."
Byrne added that he was looking to gain approval from the Securities and Exchange Commission for T0.
First announced in 2014, T0 currently lists products for license, including private equities trading, public equities trading, and short tokens that ensure that stock loans aren't double spent.
Earlier this year, Nasdaq announced it will use the blockchain to drive a private stock market. Meanwhile, Blythe Masters' Digital Asset Holdings and Symbiont, are developing their own blockchain-based systems for the securities trading.
The news broke on the very same day that Symbiont, a Bitcoin 2.0 startup, unveiled its Smart Securities platform, a technology that allows financial market participants to issue, manage, trade, clear, settle and transfer a range of financial instruments 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, the company said.
Mark Smith, CEO and co-founder of Symbiont, said:
"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."
Watch Patrick Byrne's full speech:
Image credit: Patrick Byrne, Twitter.
About Diana Ngo
Diana Ngo is a freelance fintech, blockchain news writer based in Cape Town, South Africa. She has worked for French- and English-language online publications, covering fintech, blockchain technology and digital currencies. Diana joined CoinJournal in June 2015.