Fears of banks becoming obsolete due to blockchain “unlikely”

Blockchain technology can lead to quicker, more efficient trade settlements, the Nasdaq’s president and chief operating officer Adena Friedman told CNBC on Wednesday.

Blockchain is the technology that underpins the cryptocurrency bitcoin; it is a record of all bitcoin transactions executed and maintained as a public ledger system, viewable to anyone around the world.

Speaking exclusively to CNBC’s “Street Signs”, Friedman explained blockchain technology can allow financial institutions such as the Nasdaq to track the ultimate owners of any asset classes.

She said the Nasdaq, which provides technology to over 100 exchanges and clearing houses around the world, is talking to customers about blockchain and its potential uses.

“In our space, it’s all about shortening the time to settlement and freeing up the capital that sits in the banks, that’s kind of trapped inside the clearing houses, to manage risk,” said Friedman, adding, “There’s a real opportunity for [blockchain] over time. But it’s going to take some time.”

Friedman’s comments followed those from Brock Pierce, the chairman of the Bitcoin Foundation, who told CNBC earlier in the week that fears of banks becoming obsolete due to blockchain were unlikely.

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