Australia’s ASX Limited Replacing its Old System with New Blockchain-based Solution

The latest report reveals that ASX Limited is employing distributed ledger technology (DLT) in a critical production environment.

Blockchain is becoming the most trending and sought-after technology which draws the attention of the leading and the oldest market players. However, the latest name on the list is “Australia’s Securities Exchange Ltd. or ASX Limited. It was unveiled by Peter Hiom, the deputy chief executive officer of the exchange operator at VMware’s vFORUM event in Sydney.

According to Hiom, the platform has launched a new blockchain-based solution designed to digitize multi-party workflows. Nevertheless, the platform released details about its blockchain-based solution via its website, stating that the ASX is replacing CHESS with DLT. Per the release, CHESS was developed by ASX 25 years ago to convert physical shares into an electronic format and the implementation of blockchain technology in the new system will replace CHESS. It was reported that the new system will replace the old CHESS in April 2021.

More so, the platform intends to collect feedback from users and other stakeholders which is expected to receive by Jan 17, 2020.

In late October/early November, ASX conducted a national roadshow on major Listing Rule reforms and to update listed entities on progress with CHESS replacement, including features and benefits both on "day one" and in the future.

It appears that the ASX’s CHESS was “world-leading electronic messaging standard” and by using CHESS, ASX was reportedly working under the supervision of the Australian Securities and Investments Commission (ASIC) and the Reserve Bank of Australia (RBA).

The exchange further didn’t assure if CHESS continues to provide services such as processes of clearing, asset registration, settlement and other post-trade activities which according to ASX is “critical to the orderly functioning of the market”. It further elaborates its stance as;

ASX is replacing CHESS with distributed ledger technology (DLT) which will provide a broader range of benefits to a wider cross-section of the market. While ASX works on the implementation of DLT, it will continue to support and invest in maintaining the high performance and availability of CHESS.