The Australian stock exchange (ASX) has confirmed that the technology of the blockchain will replace its current clearing and settlement system. ASX will be the first major stock exchange, which decided to take this step.
After two years of practical tests with numerous proofs of concept and prototypes, the ASX will be the first major securities exchange in the world, which will introduce the technology of the blockchain in its post-trading infrastructure. Driven blockchain, developed by new York startup Digital Asset, will replace the currently used system Clearing House Electronic Subregister System (CHESS).
The decision, announced
ASX, was taken after «the successful creation of enterprise software» on the basis of the blockchain, which has been subjected to «extensive testing» within two years to meet the «functional and capacitive characteristics, and safety requirements», which should correspond to the largest market of Australia.
«We had over 80 demonstrations of the system on the basis of the distributed registry for more than 500 participants and held not less than 60 seminars on the replacement of CHESS for more than 100 organizations world-wide financial industry», — said Deputy General Director of ASX Chi Peter (Peter Hiom).
In addition, representatives noted that the software-based blockchain has successfully passed two independent security audit by third party reviewers. CEO exchange Dominic Stevens (Dominic Stevens) said:
«ASX is carefully studying the technology of distributed registry for nearly two and a half years… after Completing this work, we believe that the use of the blockchain for the replacement of CHESS will enable our customers to develop new services and reduce costs, and it will help Australia to be at the forefront of financial innovation. Although we still have more work to do, today’s announcement is a very important step for us».
At the end of 2015, the head of the ASX Elmer Funk Kupper (Elmer Funke Kupper) argued that the introduction of the blockchain is «an opportunity that happens once in 20 years», which will help to cope with the costs, time frame and complexity of the existing platform CHESS. In January 2016 ASX paid 14.9 million Australian dollars for 5% stake blockchain startup focused on Digital Asset Holdings, which has developed a solution for ASX.
According to reports, the technology implementation plan blockchain met some obstacles in the testing phase with the shareholders, aims to maintain high profits and payment of dividends. ASX has become the most profitable of the major stock exchanges in the world this year with a total margin of 77%, ahead of the Hong Kong stock exchange, with a predicted 71%.
Announcement ASX on the implementation of the decentralized technology is an important step for the wider dissemination of the blockchain, which will make transactions cheaper, effective and will exclude from the operations of intermediaries.
The President of the Digital Asset, Blythe masters (Blythe Masters), commented:
«After such a hype surrounding the technology of distributed registry, today’s announcement is the first real proof that the technology can justify its potential. Along DA and ASX have proven that this technology works and meets the requirements of the financial infrastructure».