Mutually beneficial cooperation is cropping up in bitcoin industry. Overstock.com now owns 25% stake in government-run commercial company PRO Securities which is known for its alternative approach to trading systems. It acts differently from such stock exchanges as NASDAQ or New York Stock Exchange and is regulated by the Securities and Exchange Commission.
The purchase is all about plans of Overstock to present new digital currency. It has recently developed blockchain-like technology based on the electronic system of PRO Securities. Now approval of the SEC seems to be the last step separating Overstock from issue of digital currency. It has already filed to the SEC, currency itself as well as PRO Securities were not mentioned.
But the sum that Overstock plans to issue in shares is known – $500 million. The filing said: “We may decide to offer securities as digital securities….the ownership and transfer of which are recorded on a cryptographically-secured distributed ledger system using the technology similar to (or the same as) the distributed ledger technology used for trading digital currencies.”
PRO Securities has made amendments in its charter saying that it is now eligible to trade in virtual currencies controlled by blockchain-related technology.
The fact that PRO Securities is regulated by the SEC and besides has access to the National Market System, national system for trading equities, means much for Overstock. Now it is not only more likely to get SEC approval but can actually trade securities without that approval using Market System. It’s quite similar to what Nasdaq OMX is going to do – it is planning to trade inside its Nasdaq Private Market.
It’s interesting that Patrick Byrne, CEO of Overstock.com., has only recently become a part of tech counsel of Kentucky Senator Rand Paul. Apparently political career only boosted his intention to develop the market of digital currencies.
Blockchain technology arouses interest in some other companies. Digital Asset Holdings works in this direction while Symbiont is building the first trading platform for smart securities based on blockchain technology.
According to Adam Krellenstein, one of the founders of Symbiont, blockchain is not really suitable for public equity markets. The distributed nature of the technology doesn’t allow it to cope with fast public-equity trading. He underlines advantages and disadvantages of blockchain saying that “distributed systems – because they are distributed – trade efficiency and speed for transparency and security”.
Experts admit there are risks that investors will not accept Overstock digital currency at once. They can prefer to keep to traditional trading systems they are used to. Nevertheless having support of many representatives of digital world Overstock has all chances to achieve its aim.