Overstock’s blockchain vision just got big backing from the SEC.
The SEC approved Overstock’s plans to issue out company stock using blockchain technology. This decision sets the tone for how the financial securities market will evolve as more and more companies look toward the potential of the blockchain to streamline financial deals.
The initial plans for Overstock’s blockchain Wall Street vision was revealed in August when CEO Patrick Byrne shared his ideas for how the technology that powers bitcoin could shake up Wall Street’s markets. Byrne’s big idea for tapping into blockchain technology is to use it to change the way the stock market operates. He told Wired at the time that he wants to “bust this market open” — and by that he means that instead of having the agent lenders and prime brokers control the market, he wants stockholders to have a better share of the market.
“We’re taking a market that’s in the dark,” Byrne said, “and we’re putting it on an exchange.”
This bitcoin-inspired stock-loan system was revealed earlier this uyear by Byrne while at a cocktail party at the Nasdaq stock exchange. He further claims that his system, called TØ.com (an Overstock subsidiary), is close to gaining SEC approval.
And the blockchain technology will lead the way as the underlying mechanism to put the money system more in the hands of the people and less in the hands of the government and big banks.
Byrne’s certainly not the first to imagine how Wall Street could use the blockchain to streamline how money moves across the markets.
In fact, in May, Nasdaq said it plans to leverage blockchain technology as part of an enterprise-wide initiative. Nasdaq isn’t necessarily after bitcoin, but it is looking to use the tech behind the digital currency. Now, the New York Stock Exchange says it’s planning to roll out multiple trials of how the blockchain could be used for trading purposes. It has also expressed interest in the technology by going as far as becoming an investor in bitcoin exchange Coinbase.
While there certainly seems to be a shift toward examining how the blockchain technology could play a role on Wall Street, there are still some who suggest that opening up the markets online wouldn’t necessarily be popular among those in power.
What Byrne believes now is that blockchain “can do for the capital market what the Internet has done for consumers,” according to a more recent Wired interview.