Online retail giant has unveiled plans to start selling stocks on its blockchain-based platform for trading shares called T0. The announcement was made by the Overstock’s communications director, Judd Bagley, at the Money 20/20 conference taking place in Las Vegas.
T0 platform is planned to be launched before the end of the year, Bagley noted. He added that T0 cannot be called a stock exchange for some regulatory reasons. Instead, it is a system for selling widgets, and the initial use case will be for bonds and stocks.
Unlike traditional equity trading platforms, T0 offers both higher speed and advanced security. Users will be able to complete trades in 10 minutes, while for existing systems it usually takes three days to process transactions. Moreover, the use of the distributed ledger technology eliminates the risk of hacking attacks.
As Byrne earlier noted, blockchain can help banks to save about 80-90% on systemic costs, saying that Overstock team intends to “reunite the trade and the settlement”.
Meantime, Bagley said that Overstock has approved non-transferable rights offering that will let the company’s shareholders to buy shares of its preferred stock.
From December 15th, investors who bought Overstock shares by 7th November will be able to acquire shares of its preferred stock, including preferred shares to be issued and traded exclusively on the t0 platform. To be considered a shareholder, investors will need to keep Overstock shares by November 7, three days before the record date of November 10.
“This is the culmination of over two years of true innovation and hard work,” Byrne said. “Through this public issuance of blockchain-based securities the history of capital markets is entering a new era, the era of blockchain-based securities.”
The company plans to offer up to one million shares of the preferred stock on the platform. Also, it will allow stockholders to subscribe for shares of its Blockchain Series A Preferred.
Thus, Overstock will become the first company to legally trade a publicly listed security on a distributed ledger platform.
According to Overstock, shareholders will be able to subscribe for an alternative series of its voting preferred stock that will trade in the over-the-counter market.
The speakers at the Money 20/20 conference admitted that blockchain should be taken very seriously by banks and other financial institutions. Some of the leading stock exchanges are already working on integrating the technology into its systems.
More exchanges are likely to develop their own blockchain platforms in the near future what will drive the adoption of the technology.