The Athens Stock Exchange (ATHEX) is preparing to revolutionize the financial world by incorporating blockchain technology into its Electronic Book Building (EBB) system. In collaboration with the Sui blockchain ecosystem, ATHEX aims to create digital certificates for securities, offering enhanced security, efficiency, and transparency to its users. Traditionally, the issuance process involves separate confirmations for securities allocation and settlement, but blockchain integration simplifies this by combining them into a single, streamlined confirmation. This integration could result in faster and more efficient transactions for all parties involved, including the exchange, its members, investors, and issuers raising capital.
ATHEX announced its plans in early March, and Cointelegraph spoke with a representative from Sui to gain further insight into their collaboration and the use of blockchain in the traditional finance setting. The primary motivation behind integrating blockchain into a highly sensitive network like a stock exchange is the significant security boost it provides. Digital certificates, inherent to blockchain transactions, offer an advanced layer of security while being recorded on a public, immutable ledger, reducing the risk of manipulation—a persistent challenge in traditional finance. This transparency also extends to regulatory oversight, making it easier for regulators to monitor trade activities for suspicious behavior.
The new tool being developed by ATHEX, the EBB, aims to be a future fundraising tool that allows early-stage and mature companies to list transferable securities. According to the Sui representative, ATHEX’s EBB places it at the forefront of innovation compared to exchanges worldwide. They noted that ATHEX successfully relaunched its corporate bond market using the EBB, which received high demand from retail investors and significant oversubscription. When implementing blockchain at scale in a traditional financial market project, it is crucial to prioritize speed, security, and fees of the blockchain network.
While ATHEX is one of the pioneering stock exchanges implementing blockchain through its EBB tool, other global stock exchanges have also been exploring the Web3 space. On March 11, the London Stock Exchange (LSE) announced its intention to consider applications for Bitcoin and Ether cryptocurrency exchange-traded notes (ETNs) during the second quarter of 2024. Although not a blockchain integration, LSE’s openness and Web3-friendly approach may indicate a larger trend in traditional finance.