Published: Fri, December 08, 2017
Finance | By Loren Pratt

The Australian Securities Exchange Just Made Blockchain History

The Australian Securities Exchange Just Made Blockchain History

The Australian Securities Exchange (ASX) is to turn to the distributed ledger technology to underpin its new system when it upgrades CHESS, the current ageing technology that it uses.

Blockchain is a method of recording data via a digital ledger of transactions, agreements, contracts or anything that needs to be independently recorded and verified as having happened.

There is no specific date reported on when the ASX will shift towards blockchain technology.

"We're the first exchange to consider taking this step", Peter Hiom, ASX deputy chief executive officer said on a media conference call. In May, Nasdaq Inc. and Citigroup Inc. said they would introduce a system using blockchain technology to record and transmit payments.

Several other exchanges have been experimenting with blockchain technology. Earlier that year, International Business Machines Corp. said it was working with Japan Exchange Group to test the potential of blockchain technology in trading in low-transaction markets.

Dominic Stevens, ASX Managing Director, and CEO said: "ASX has been carefully examining distributed ledger technology for nearly two-and-a-half years, including the last two years with Digital Asset, in order to understand its potential application".


Although similar ledger technology is used to track digital currencies, the system proposed by ASX would operate on a secure private network where users are known, have permission to access and must comply with enforceable obligations.

"ASX has been carefully examining distributed ledger technology for nearly two-and-a-half years, including the last two years with Digital Asset, in order to understand its potential application".

Because of potential applications with digital assets - including securities and stock exchanges - numerous companies have begun outreach into the industry. IBM meanwhile has already predicted that most banks will adopt blockchain.

The ASX also announced that it will exercise its right to participate in DA's recent Series B fundraising, subscribing for US$3.5 million in convertible notes.

After over two years of real-world testing with multiple proofs of concept and prototypes, the ASX will become the first major securities exchange in the world to implement blockchain technology to its post-trade infrastructure - a core process.

"We believe that using DLT to replace CHESS will enable our customers to develop new services and reduce their costs, and it will put Australia at the forefront of innovation in financial markets", said ASX managing director and CEO Dominic Stevens.

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