The Malta Stock Exchange (MSE) have announced the creation of a Blockchain committee and think tank to assist in the formulation of a strategy geared towards addressing the emerging technology. The Committee will consist of members of the MSE, its Chairman and CEO as well as a range of outsider experts. The new think tank will be chaired by Dr Abdalla Kablan who is a renowned entrepreneur and academic specialising in the field of intelligence, big data, analytics and computational finance, as well as being a Director of the MSE. Dr. Kablan was described by the Chairman of the MSE as a “preeminent technologist and a globally recognised expert on blockchain technology.”
Blockchain is a distributed database which maintains a continuously growing list of records called blocks. Each block within the chain contains a timestamp and a link to the previous block and it cannot be altered retrospectively. The technology effectively mashes up cryptography and p2p networking to create a shared database of transactions and other information which is open to all, controlled by no-one and cannot be retrospectively edited. Examples of blockchain applications include electronic currencies such as bitcoin and are used by companies such as Microsoft, Nasdaq, Deloitte and Bitpay.
The concept of blockchain and its application offers significant potential in the Finance Industry, especially when applied to record keeping, trade verification and settlement. Back office can also be revolutionised by ensuring the settlement process is more instantaneous, cost-efficient and productive. As well as offering benefits in private industry, blockchain is now being used by SCOTEX, the Scottish stock exchange and the Australian Stock Exchange. Reasons for its popularity include the fact that it allows investors and brokers to receive their money only 15 minutes after a trade is executed. Infact almost all of the major global stock exchanges have started to look at blockchain as an alternative for their current platforms, a move that could save the financial industry over 41 billion annually in back office costs.
The creation of the Malta Stock Exchange Blockchain Consortium signals the start of an exciting time in the Maltese Financial Industry and further complements the significant investments being made in advancing the Maltese economy and the technologies that support it.