(Corrects launch year)
By Anna Irrera and John McCrank
NEW YORK, March 14 (Reuters) - Nasdaq Inc has provided blockchain technology to run a new exchange to trade guaranteed advertising contracts as more mainstream finance projects using the record keeping software move into the real world.
The New York Interactive Advertising Exchange (NYIAX), which is set to launch in the fourth quarter of 2017, will provide an electronic marketplace for publishers, advertisers and media buyers to buy and sell future advertising inventory, global exchange operator Nasdaq and NIYAX said on Tuesday.
Participants on the exchange will forward-like contracts, or agreements to buy and sell an asset at a specified price and a set future date. The goal is to offer a more efficient and transparent way for players in the advertising market to sell and buy inventory, NYIAX executives said in an interview.
NYIAX’s platform was built using Nasdaq’s exchange technology, which incorporates blockchain as its core ledger for transactions.
Blockchain, which first emerged as the system underpinning cryptocurrency bitcoin, is a distributed record of asset ownership that is maintained by a network of computers, rather than a centralized authority. Any change to the ledger must be approved by all participants on the network, making it tamper-proof with and an ideal tool for auditing.
Financial institutions have been ramping their investment in the technology in the hopes that it can provide a simpler, cheaper and more transparent way to run some of their processes, such as the clearing and settlement of securities.
Nasdaq, one of the world’s largest providers of technology for exchanges and clearing houses, has been an outspoken supporter of the technology on Wall Street.
It currently uses blockchain to power its U.S. market for shares of private companies and has been testing it to run proxy voting for companies listed on its exchange in Estonia.
It revealed last year that it was planning to integrate blockchain in the technology it sells to other exchanges.
NYIAX is currently onboarding clients for a pilot program which it aims to complete in late September.
While it expects trading to initially come from firms in the advertising market, it hopes that the asset class will generate interest from financial firms. It will initially focus on digital advertising, but plans to expand to other media.
“Once the exchange achieves critical mass within digital, we will begin supporting TV, print, radio and out-of-home markets,” said Lou Severine, NYIAX’s CEO. (Editing by Bernard Orr)