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Image: ASX
The Australian Securities Exchange (ASX) announced in June 2016 that it was building a new post-trade solution using blockchain technology. The solution replaces its legacy Clearing House Electronic Subregister System (CHESS) platform, which has been running for around 25 years.
The ASX contracted US blockchain-focused Digital Asset to help it build the solution, and in September last year it claimed the completion of a prototype.
It’s been over three years in the making, and ASX executive general manager of Equity Post-Trade Services Cliff Richards told Sibos in Sydney on Thursday the new system is still on schedule for an already delayed first-half 2021 go-live.
The CHESS replacement system has been touted as the world’s first industrial-scale blockchain-based system for use in financial services. But why did the ASX choose distributed ledger technology (DLT), and what does the new CHESS solution actually look like?
CHESS currently performs all the core clearing and settlement functions of the Australian cash equities market, however, like most ageing technology assets, its life was nearing end.
“Coincidentally this occurred at a time when topics of blockchain, particularly the bitcoin blockchain, public implementations, were very much coming into the press,” Richards said. “So not only had it caught the attention of our technologists, the board was aware of it as well.”