The Australian Securities Exchange (ASX) had previously announced plans to use blockchain technology for the replacement of their 25-year-old CHESS system. The launch date has now been delayed by six months after stakeholder feedback was received.
While Bitcoin was still battling to reach that $500 mark in 2015, Australia was already looking into the advantages of using blockchain technology, and not even for a humble project either. They were looking into overhauling the Clearing House Electronic Sub-register System (CHESS) of their Australian Securities Exchange (ASX).
The original system was introduced over a quarter century ago and while it has obviously served ASX well, the exchange believed that it was time to take advantage of the great strides made in technology. They partnered with US-based Digital Asset to develop the distributed ledger technology (DLT) to make the replacement possible. ASX actually purchased a 5% stake in the company for AUS $14.9 million.
Everything seemed to be on track with the new system scheduled for launch during the last quarter of 2020. However, according to Reuters, this date has now been pushed back by six months to March or April of 2021.
Too Ambitious a Timeline
This decision was based on feedback received from 41 stakeholders, which included concerns about whether or not the project would be completed by the previously determined date. A document containing the exchange’s response to the feedback stated:
Many respondents considered the proposed timeline for CHESS replacement to be ambitious given the extent of the new features to be included as part of the Day 1 scope. Some respondents also noted competing demands for resources with other internal projects or market changes.
The document went on to state that while feedback was positive overall, these stakeholders still seek to better understand this type of technology and how it can be integrated into existing or new processes, adding:
Overall the submissions were supportive of ASX’s approach to updating Australia’s equity post-trade infrastructure and reflected a strong interest in better understanding the potential benefits that a DLT-based system can offer.
The six-month delay will also give the exchange more time to thoroughly test all of the proposed new features. In addition, the ASX will extend mandatory accreditation by six months.
Still Big on Blockchain
Even though the launch date has been delayed, it is still evident that the exchange is betting on blockchain when it comes to process improvement, and they’re not the only ones.
The so-called Australian Blockchain Network (ABN) could be launched before the end of this year and will give a range of local businesses a chance to experience the benefits of blockchain for themselves. In addition, the Commonwealth Bank of Australia (CBA) recently enjoyed the successful and lucrative launch of the bond-i, the world’s first completely blockchain-based bond.
Do you think more global exchanges will soon use DLT to update their systems? Let us know in the comments below!
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