Yesterday Nasdaq’s technology arm Market Technology announced plans to integrate its Nasdaq Financial Framework (NFF) with Microsoft’s Azure Blockchain. Nasdaq’s modular technology is used by more than 100 exchanges, clearinghouses and Central Security Depositories in 50 countries, including the Singapore Exchange.
“Our [capital markets] industry is evolving faster than ever with the advent and advancement of cloud, blockchain, machine intelligence and others. Key players in the industry are looking to these technologies to explore how they can become more effective and efficient, but also gain competitive advantage,” said Magnus Haglind, SVP and Head of Product Management for Nasdaq’s market technology business.
One example is Nasdaq’s work with the Singapore Exchange and Monetary Authority of Singapore on a settlement system for tokenized assets. In that case, the plan is also to tokenize currencies to enable delivery versus payment – on-chain instant settlement.
The Azure integration aims to enable interoperability and communication with the NFF. It’s particularly for delivery, payment, and settlement of transactions because these may exist on multiple blockchains and use different payment rails.
“With multiple blockchains in use by various industry participants, we believe that the combination of NFF and Microsoft’s blockchain technology can remove some of the project complexities that exist in this realm,” said Tom Fay, SVP of Enterprise Architecture at Nasdaq. “Additionally, as more industries move towards capital markets technology and structures, we see the potential for blockchain to provide value in secure, frictionless and instantaneous matching of buyers and sellers.”
Fay is looking to Microsoft to handle “the semantics of ledger communication, security, deployment and orchestration”.
Microsoft stated that capital market organizations would be able to incorporate blockchain technologies without the need for ledger-specific skills or knowledge. In reality, given the sums of money at stake, there’s a good chance they’ll have experts. That doesn’t diminish the potential value-add from Microsoft’s tools.