Biggest Stock Exchange in Australia Mulls Move to DLT

BTC Wires: The largest exchange of Australia, the Australian Securities Exchange, is contemplating a move to DLT or distributed ledger technology to substitute its existing settlement system with as it will help them save almost $23 billion. Dominic Stevens, who serves as the CEO as well as the managing director of ASX Limited, announced last Thursday that they are mulling a switch from CHESS (Clearing House Electronic Subregister System) to DLT as that would allow them to do their work more efficiently, especially when it comes to message transmissions and information access.

Right now, equity clearance and settlement requires the industry to bear a cost of about $100 million with communications and miscellaneous expenses pushing the total cost to $23 billion. A shift to DLT will add a great amount of value to the industry and act as a business enabler for both customers and the firms and also promote innovation in the industry.

Stevens said that the CHESS system is regularly used by participants to exchange messages to ensure proper reconciliation of the same. However, this process tends to see a lot of errors being made that are not the most easy or inexpensive to rectify. Also, since different databases exist, multiple softwares can sometimes end up doing the same work, causing pointless wastage and loss. Bringing in DLT can help tackle this problem. The new system will allow participants to run nodes rather than exchanging messages to and fro, with a central database, in place of a large number of separate ones. Even so, customers not willing to make use of DLT may still choose to send and receive messages back and forth like they do with the existing system.

In the beginning of the current year, ASX had made an announcement that it was looking for feedback about the suggestion to replace CHESS with DLT and Stevens’ Thursday announcement confirmed to observers and blockchain industry insiders that the exchange was indeed considering such a shift and that it was due to be rolled out by 2020.

Digital Asset Holdings, partially owned and controlled by ASX Limited is providing the basis for the platform, which is expected to do more that just operate with equities, and also settle bonds of other kinds of assets.