Venezuela
Venezuela is starting to test blockchain-powered securities trading platforms (stocks and bonds / securities). Each share unit is tokenized as a crypto asset to make it easier to transact and have global reach.
“We authorized the Venezuela Decentralistic Stock Exchange (BDVE) platform to test it for 90 days. If successful, then full permission will be granted, "said Venezuela's National Securities Supervisory a few days ago.
For Venezuela, this method allows the country to access capital into its stock market from abroad without using US dollars from a number of countries.
It is understood that the country led by Nicolas Maduro is subject to economic sanctions by the US, which do not allow financial transactions to enter and exit from the country.
Based on information on the platform, the securities (securities) being traded are in the form of tokens of type ERC-223 or ERC-721.
Although there is no explicit mention of running on the Ethereum blockchain, the use of such a standard token is a strong indication that the platform is indeed leveraging the blockchain of a million people. The platform structure itself seems to run on the blockchain, like a decentralized exchange.
However, they did not say whether Venezuela's oil-backed national crypto asset, Petro, would be used by the exchange.
Venezuelan President Nicolas Maduro on the same day announced a new draft sanctions bill to reduce the impact of the US-imposed economic sanctions.
The bill, currently being reviewed by Venezuela's National Constituent Assembly, notes that private and state-backed crypto assets could be used to conduct trade beyond the reach of US sanctions.
China
A blockchain powered stock exchange has been put to trial in Beijing recently. The trial is a further step after being in Shenzhen in July 2020.
Reporting from local Chinese media, China Daily, the trial was the first to be held regionally.
“The two parties [the Shenzhen and Beijing-Red stock exchanges] have redeveloped and built an equity (securities) registration and trading system at the Beijing Central Stock Exchange using blockchain as the basis. The stock exchange said that the application of blockchain technology in the securities trading sector reduces the cost of information asymmetry, standardizes the management of company shares and plays a better role in financing the capital market, ”wrote China Daily, citing comments from several sources.
In July 2020, the China Securities Commission issued a trial permit for blockchain-powered stock exchanges on 5 exchanges, namely Beijing, Shanghai, Jiangsu, Zhejiang, Shenzhen. This is the first pilot program in Panda Country.
In the trial in Beijing, Ge Yimiao, Head of Information Center for the China Securities Commission, said that the Beijing and Shenzhen Stock Exchanges will continue to strengthen the application of blockchain technology in this capital market sector.
China's trading partner, Venezuela, also did something similar in the last few days. Venezuela is starting to test blockchain-powered securities trading platforms (stocks and bonds / securities). Each share unit is tokenized as a crypto asset to make it easier to transact and have global reach.
For Venezuela, this method allows the country to access capital into its stock market from abroad without using US dollars from a number of countries.
Application
The implementation of blockchain on the stock exchange is not a figment. A number of serious studies have surfaced since the last few years.
In 2018, for example, the Organization for Economic Cooperation and Development (EOCD) stated that blockchain is very superior and appropriate to be used for a securities trading platform (capital market).
"Stock exchanges globally, including in Asia, have begun experimenting with blockchain technology for clearing and settlement, post-trading, and in issuing securities (mostly corporate bonds)," said EOCD.
When the report was published, a number of countries had tested blockchain-powered securities markets, including Hong Kong, India, Japan, Myanmar and South Korea.
Congrats Venezuela.