Can Blockchain Run a Financial Market? This Company Thinks So

The following post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga.

In 1792, about 24 stockbrokers and merchants gathered in lower Manhattan under a buttonwood tree to sign an agreement that would allow them to trade with each other at a set commission. This became known as the Buttonwood Agreement and marked the foundation of the New York Stock Exchange (NYSE). 

Fast forward over 200 years — markets like the NYSE and Nasdaq are dominated by innovative companies such as Amazon AMZN and Apple AAPL. But the exchanges themselves have undergone few transformations. 

Financial markets today are still built around the idea of a paper stock certificate. Clearing, settlement and custodians require expensive, complicated back-office processes that take 2 full days. Much of the work is manual and at high risk for errors and inefficiencies. 

How Blockchain can Improve Financial Markets

Since Bitcoin’s (BTC) inception, blockchain’s potential for improving the way organizations store and manage data has been celebrated. In recent years, cryptocurrencies have gained traction among investors while larger organizations are beginning to implement blockchain technology for recordkeeping and other services. 

As a digital record, blockchain safely stores information while eliminating the possibility of alterations or hacks. Many are decentralized and oftentimes have the added bonus of automation. 

The founders of Prometheum identified how blockchain could close gaps and mitigate inefficiencies within modern financial markets and even improve regulation surrounding digital tokens. 

Combining over 50 years of securities law experience, 20+ years of blockchain and distributed architecture experience, and 20+ years of market systems design experience, Prometheum was built as a bridge for traditional Wall Street and the digital asset universe. 

How Prometheum Works

Prometheum is the world’s first SEC and FINRA-regulated, full-service financial market and trading platform built on blockchain technology. Its blockchain system intends to remove the need for manual processes — with settlement, clearing and custody processes operating at next-generation efficiency. 

Prometheum is designed for issuers, retail investors and financial professionals alike. It offers tech companies and blockchain firms looking to raise capital as an alternative to traditional (initial coin offerings) ICOs, venture capitalists (VCs), and initial public offerings (IPOs). 

Many startups are already capitalizing on digital tokens as a means to raise capital. Yet, these cryptos aren’t compliantly registered and no fully compliant markets exist to support their trading. 

Prometheum bridges this gap. Its infrastructure makes it possible for digital assets to be issued, traded and processed compliantly under the Federal Securities Laws (FSL). 

Prometheum also makes it possible for traditional securities, such as equity and debt, to trade on distributed ledger technology (DLT) — replacing outdated financial market architecture with blockchain technology. This innovative financial ecosystem ensures every investor is fully protected through issuer accountability, higher transparency and greater market integrity. 

The Next-Generation Financial Ecosystem

Blockchain holds the promise to revolutionize highly regulated industries and the way organizations tackle recordkeeping. It’s about time this change made its way to financial markets. 

By providing a platform for companies to raise capital through tokens in a fully regulated environment, Prometheum is closing the gap between retail investors and equity markets. It also proves a safer, more efficient, automated solution for manual clearing, settlement and custodians processes. 

All this takes place within a user-friendly platform where both accredited and nonaccredited investors can trade digital assets — complete with AML/KYC, risk management, and market surveillance systems. The unparalleled protection for investors ensures a fair and orderly market like no other. 

Prometheum also maintains its own FIX engine, allowing traditional brokers to tie into the Prometheum ecosystem and offer clients the opportunity to trade digital assets through their existing brokerage account. 

Since its inception in May 2017, Prometheum has raised $27 million and is currently awaiting approval to become the first public ATS for digital assets in the United States. 

Learn more about Prometheum here. 

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. This content is for informational purposes only and not intended to be investing advice.