Bold and tedious: London Stock Exchange block chain project is a repeat of history


nnnThe small and medium-sized enterprises play an important role in the development of the national economy, such as the promotion of economic development in Europe. So twenty years ago, the London Stock Exchange set up an alternative investment market in numerous voices, facilitating the small-scale high-growth companies that could not meet the requirements of the exchange. The block chain technology once again allows the exchange to see the potential of equity market changes, plans to use the Italian Stock Exchange and IBM developed the chain chain platform to store private company records.n
nnTranslation: Annie_Xun
nTwenty years ago, the London Stock Exchange (LSE, London Stock Exchange) a bold move to change the company’s financial, low-key has caused a lot of doubt.n
nAt that time, LSE wanted to open the market, will benefit diversification, so launched a new stock exchange, to meet the requirements of the small-scale high-growth enterprises to facilitate the transaction. So there was an alternative investment market (Aim, Alternative Investment Market).n
nIn addition to the occasional problem, this adventure can be said to be successful.n
nFrom the beginning of the small release of 10 companies, the new exchange in 2017 to the development of up to 1,700. Although many listed companies are small, some of the company’s market value can match the larger exchanges of the company.n
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nCyclen
nNow history may repeat itself.n
nCoinDesk reported this week that the LSE subsidiary tried to store private company records with a chain-chain platform. The platform developed by the Italian Stock Exchange (Borsa Italia) and IBM is aimed at digitizing the ownership structure, managing equity structure, and increasing investor confidence.n
nThe exchange once again choose to be careful to achieve great goals.n
nAlthough the first project focused only on investment records, the exchange realized that it was the first step in the digitization of shares and bonds.n
nThe idea of ​​issuing equity in the chain chain has long been there. The United States Delaware has made significant progress in this area, the global exchange is also being tested.n
nIts impact on corporate finance is enormous. The issuance of equity on distributed books can reduce barriers and costs, allowing private companies to achieve greater equity flexibility and liquidity. If investors know that the private sector is easier to withdraw, it will be more interested in investing in such enterprises and making private sector financing easier. Exchanges can reduce administrative costs and increase regulatory transparency, resulting in less stringent compliance requirements.n
nIn addition to increasing investment and efficiency, the expansion of financial markets can also solve another problem. Despite the stagnation of market growth before some institutions are restless, but the EU is still encouraged to create a similar Aim small trading market. The purpose is not only to support entrepreneurship, or to restore the system balance: the euro area market share of GDP is almost half of the United States.n
nIt seems that the LSE project is a big step forward for both market and block chain development.n
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nKeep alertn
nBut we still have to understand its possible impact on financial stability.n
nLiquidity means risk. In private equity, investors usually hold long term. Because the withdrawal is more complex, supporters tend to use the long-term assessment criteria of market opportunities, which are usually effective in dealing with unexpected problems. Companies that hold tradable securities are generally unable to secure the benefit, resulting in a decline in management quality.n
nEven if investors focus on long-term fundamentals, the convenience of withdrawal may be able to increase its attractiveness. We know that in the chaos of the market, often lack common sense. People panic or just negative rumors, the overall market sentiment changes will allow enterprises and investors to retreat.n
nIn general, the short-term impact of it and other projects may be positive. Further testing, the introduction of practical projects, can promote entrepreneurship and investment, thus affecting the technical deployment and economic growth. It is important to remember that there are many reasons for the investment barrier.n
nAs with 22 years ago, the LSE strategy is bold and prudent; it will make innovation gradually find the location in the field of rapid change, step by step carefully build a new system.n

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