‘Today’s announcement delivers…proof that the technology can live up to its potential.”
The Australian Securities Exchange (ASX) has become the first major bourse to announce the adoption of blockchain technology—the same kind of tech that underpins the bitcoin cryptocurrency—to record shareholdings and manage the clearing and settlement of equity transactions.
Blockchain or distributed ledger technology (DLT) uses a shared ledger to permanently record transactions in a way that is practically impossible to tamper with. The vendor of this particular platform is Digital Asset, which has the backing of the likes of Deutsche Börse Group, JPMorgan Chase, Accenture, IBM, Goldman Sachs, and of course ASX.
ASX said Thursday that its soon-to-be-scrapped Clearing House Electronic Subregister System (CHESS) was “world-leading” when it was introduced in the 1990s, but testing of the new DLT software over the last two years has shown it to be better.
“ASX has been carefully examining distributed ledger technology for almost two-and-a-half years, including the last two years with Digital Asset, in order to understand its potential application,” ASX CEO Dominic Stevens said in a statement. “Having completed this work, 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.”