NEWSBYTE: The Gibraltar Stock Exchange (GSX) has successfully deployed a Digital Stock Exchange prototype, on the STACS Network’s Global TestNet, according to an announcement from the GSX.

It has also issued a demonstration bond using the new system.

The STACS (Securities Trading Asset Classification Settlement) Network is designed to support capital markets using distributed ledger technology. According to its proponents, it is a “new-generation scalable ledger network layer that seamlessly stacks on top of existing financial institutions” and enables banks and other financial services institutions to use digital tokens.

Nick Cowan, CEO of the GSX and founder of the GSX Group, said, “Our vision at GSX has been to revolutionise the current capital markets model by enabling the listing and trading of digital securities.

“This is the next significant step in a new paradigm for global finance: opening up new liquidity pools and products. The successful demo bond issuance on STACS brings us closer to achieving our goal, as one of the first movers in this nascent technology.

“The GSX will continue to push the boundaries and advocate for greater adoption, so together we can direct the future of capital markets.”

According to the announcement, the GSX Prototype has the capacity to launch a bond on STACS, track selling reports, enforce selling and eligibility restrictions, and distribute repayments using smart contracts.

The demo bond issuance brings the GSX a step closer to its ambition of enabling the issuance, trading, and clearing of digital securities on blockchain-based systems.

Last year, 75 banks joined the Interbank Information Network, an experimental blockchain project to explore whether distributed ledger systems can speed up payments that have been held up by compliance checks or missing data. Also in 2018, IBM launched a blockchain-based clearing network for banks.
Meanwhile in May 2018, crypto investment bank and asset management company Clipper Coin Capital (CCC) was launched in Hong Kong, seeking to be an arbiter of financial research, investment banking, and asset management services to the crypto market. Its founding aim was to avoid the ‘market for lemons’ problem that can afflict digital tokens, in which high-quality assets fare no better than low-quality ones (lemons) due to overall market uncertainty.

Source: Press release

Be part of a discussion and connect with like-minded leaders in your sector at our exclusive event series on banking and RegTech.