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Australia is now home to the world's first blockchain-based stock exchange

07 December 2017

Australia's primary securities exchange, ASX, has announced its intention to replace its clearing and settlement system, CHESS, with distributed ledger technology (DLT or blockchain) developed by its technology partner Digital Asset (DA).

With the emergence of blockchain potentially requiring the government to find other means of tracing the income and assets of organisations and individuals, a House of Representatives committee has toyed with the idea of the ATO heading down the distributed ledger path.

The ASX is now a blockchain stock, of sorts, as it swaps its software over to distributed ledger technology.

Singapore also has a link to Masters as she was appointed to the key advisory panel set up by the Monetary Authority of Singapore.

The exchange, which has been looking to replace its existing system for more than two years, said it aimed to disclose the proposed timing of the change and the functions the new technology will initially have by the end of March. ASX said it is now taking the opportunity to replace CHESS with a next generation post-trade platform using contemporary technology that makes an important statement of embracing change to the rest of the world.

Ms. Masters, who helped pioneer credit-derivatives markets in the 1990s, said Digital Asset and ASX have shown the technology works and can meet requirements for "mission-critical" financial infrastructure. It continues to be a robust and reliable system.

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Meares said they were satisfied that the company was doing the right things to ensure the travelling public's continuing safety. The airline is cancelling and rescheduling some worldwide flights due to the incidents.

The testing confirms ASX's confidence in the functional, capacity, security and resilience capabilities of DA's application of DLT to meet the needs of Australia's financial marketplace and maintain the highest regulatory and operational standards.

"We believe that using DLT (distributed ledger technology) 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", he says.

DLT software will settle and clear equity trades across a network where participants are known or "permissioned" to have access and must comply with the exchange's ongoing and enforceable obligations.

"We support the ASX's commitment to designing a system that does not raise barriers to access for non-affiliated market operators and clearing and settlement facilities", said Morrison.

Blythe Masters, Digital Asset CEO at ASX, said that after so much hype regarding DLT, today's announcement delivers the first meaningful proof the tech can live up to its potential. It said Thursday it would exercise its right to take part in Digital Asset's recent fund raising, buying US$3.5 million in convertible notes. JPMorgan in October rolled out its latest pilot program to use blockchain to enable faster, more secure transfers of cross-border payments between it, Royal Bank of Canada and Australia & New Zealand Banking Group Ltd.

Australia is now home to the world's first blockchain-based stock exchange