The Australian Stock Exchange is betting on blockchain for their new clearing house platform
In the middle of what can only be called a Bitcoin bubble, news that the Australian Stock Exchange (ASX) is replacing their Clearing House Electronic Subregister System (CHESS) with distributed ledger technology built on blockchain caught my eye.
As I have been saying for some time now, the incredible jumps in Bitcoin value takes the focus away from the underlying technology, blockchain.
The ASX CHESS system was built over 20 years ago and underpins post-trade processes of Australia’s cash equity market. Today, CHESS is the core system that performs the processes of clearing, settlement and asset registration, which are critical to the orderly functioning of the market.
The decision to replace this system means that the ASX can meet and respond to changing local and global markets, and promote further innovation through new levels of functionality, open standards and flexible technology.
The ASX website lists one of the benefits of the change being operational efficiencies – being able to streamline functions and workflows, remove embedded paper-based processes and mitigate manual errors, and be effective and cost-efficient to operate, support and enhance.
The ASX saw that a 20-year old system could never have imagined that there would be a need to interconnect with multiple vendors and machines in an open and secure way.
If one of the larger exchanges in the world has decided to move over to blockchain / distributed ledger technology, then it warrants a review to see if this technology could simplify and improve efficiencies in how you store and record transactions in your company or industry.
Is your back-end system ready for an overhaul?
More on the ASX DLT platform can be found here.