ASX to replace post-trade systems with Digital Asset technology
07 December 2017 Sydney
Image: Shutterstock
The Australian Stock Exchange (ASX) is set to replace the Clearing House Electronic Subregister System (CHESS), which underpins its post-trade processes, with distributed ledger technology (DLT) developed by its partner Digital Asset.
The decision follows two years of testing and development, and represents a milestone in development of DLT. The technology is intended to enhance the exchange’s clearing and settlement transactions through better record keeping, reduced reconciliation, better quality data and faster transaction times.
ASX has conducted several demonstrations and workshops over the last two years, which it said confirmed confidence in the “functional, capacity, security and resilience capabilities of Digital Asset’s application of DLT”. It also conducted stakeholder consultations and briefing with regulators.
The testing included two independent third-party security reviews of Digital Asset’s technology.
ASX said that the scope of day-one functionality, and the proposed timing for transition, are expected to be released for market feedback at the end of March 2018.
Dominic Stevens, managing director and CEO of ASX, commented: “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.”
“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. While we have a lot more work still to do, today’s announcement is a major milestone on that journey.”
Blythe Masters, CEO of Digital Asset, said: “After so much hype surrounding distributed ledger technology, today’s announcement delivers the first meaningful proof that the technology can live up to its potential.”
“Together, Digital Asset and our client ASX have shown that the technology not only works, but can meet the requirements of mission critical financial infrastructure.”
The decision follows two years of testing and development, and represents a milestone in development of DLT. The technology is intended to enhance the exchange’s clearing and settlement transactions through better record keeping, reduced reconciliation, better quality data and faster transaction times.
ASX has conducted several demonstrations and workshops over the last two years, which it said confirmed confidence in the “functional, capacity, security and resilience capabilities of Digital Asset’s application of DLT”. It also conducted stakeholder consultations and briefing with regulators.
The testing included two independent third-party security reviews of Digital Asset’s technology.
ASX said that the scope of day-one functionality, and the proposed timing for transition, are expected to be released for market feedback at the end of March 2018.
Dominic Stevens, managing director and CEO of ASX, commented: “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.”
“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. While we have a lot more work still to do, today’s announcement is a major milestone on that journey.”
Blythe Masters, CEO of Digital Asset, said: “After so much hype surrounding distributed ledger technology, today’s announcement delivers the first meaningful proof that the technology can live up to its potential.”
“Together, Digital Asset and our client ASX have shown that the technology not only works, but can meet the requirements of mission critical financial infrastructure.”
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