The Abu Dhabi Securities Exchange has inked a partnership with Equifax, a UK-based fintech company that provides blockchain technology services for capital markets. Equichain will be advising ADX on the best way to use new technologies including blockchain to increase the operational efficiency of the exchange in terms of transaction speed and security.
ADX Chief Executive Rashed Al Blooshi released a statement on Monday saying:
“The open exchange with Equichain and members of the working group will allow us to identify and test new applications of blockchain technology, aiming to enhance the speed and security of capital market transactions to the benefit of our investors and stakeholders.”
Many capital markets across the Arabian Gulf are considering blockchain and related fintech technologies for their logistics and operations as the trend of blockchain adoption gains more traction worldwide.
Governments in the oil-rich region have identified fintech as a means of diversifying from the traditional hydrocarbon-based industries which may have their days numbered as environmentalism looks to new solutions to provide fuel for heating and transport – a knowledge-based economy and digital enterprises may be the answer. The governments of the UAE, Kuwait, and Bahrain have all already developed new regulations for the fintech industry.
ADX is the third stock exchange in the world and the first in the Middle East/Africa region to adopt blockchain after already using the distributed ledger technology for its e-voting services for the annual general meetings of its listed companies according to Al Blooshi’s emailed statement. The statement further read:
“The goal of this strategic initiative is to seamlessly connect the two ends of the institutional investment spectrum through blockchain technology, thereby eliminating some of the intermediating layers that form part of the trade cycle, whilst enabling incumbents to redefine and expand their product scope.”
Equichain is based in London and manages two groups which are both available by invite only: one for institutional investors and one for market infrastructure providers like stock exchanges. Blockchain could help simplify the trading cycle and increase the efficiency of the exchange processes.
ADX will join the second group which also includes fintech and financial services industry thought leaders. The statement announced that the group will “explore applications of Equichain’s platforms and products, in addition to providing a forum to discuss the practical application of blockchain in capital markets.”
ADX will be a partner in the group and as such work closely with other partners to share knowledge and experiences of the use of blockchain technology in the industry.
Equichain CEO Nicholas Bone said:
“This [partnership] will further our efforts towards establishing a more streamlined capital markets environment for investors, providing greater efficiency, reduced risk and lower cost.”