The Australian Stock Exchange (ASX) has verified that blockchain technology will change its current clearing and settlement system, becoming the world’s first major stock exchange to achieve that.

After more than two years of real-world testing with several proofs of model and prototypes, the ASX will turn out to be the first major securities exchange in the globe to execute blockchain technology to its post-trade infrastructure. The blockchain, developed by New York-based business startup Digital Asset, will reinstate the exchange’s current Clearing House Electronic Subregister System (CHESS).

The end result, Australian Stock Exchange (ASX) declared [PDF] now, comes after ‘the powerful build of an enterprise-ready’ blockchain software which has been set to extensive suitability testing’ within a two-year interval to satisfy the ‘operational, capacity, safety and endurance capabilities’ anticipated by Australia’s largest stock market.

“We have awarded over 80 DLT system admissions to over 500 attendees, and ran over 60 CHESS replacement workshops for more than hundred organizations in the worldwide financial services sector,” disclosed ASX deputy CEO Peter Hiom.

Further, the exchange operator also disclosed that the blockchain software effectively approved two independent security audits by third-party reviewers.

ASX managing director and CEO Dominic Stevens stated:

ASX has been closely analyzing distributed ledger technologies for nearly two-and-a-half years…Having finished this job, we think that utilizing DLT to substitute CHESS will empower our clients to create new solutions and decrease their expenses, and it’ll place Australia in the forefront of innovation in financial markets. While we’ve got far more work still to do, today’s announcement is a significant landmark on that journey.

In late 2015, ASX managing director Elmer Funke Kupper stated that the adoption of blockchain technology was a “once in a 20-year opportunity” to adopt digitization and curtail the costs, timescales, and intricacies of the present CHESS platform. On January 2016, the ASX paid AUD14.9 million for a 5 percent equity stake in blockchain-startup Digital Asset Holdings, the latter that moved on to create ASX’s recently adopted blockchain alternative.

The strategy to employ blockchain tech allegedly met some friction throughout the trial period from shareholders to maintain high-profit earnings and dividend payouts. Australian Stock Exchange (ASX) has been the world’s most profitable significant stock market this year, with a gain margin of 77%, before the Hong Kong Exchange using a whopping 71%.

However, the ASX’s announcement to accept the decentralized technology is an important endorsement of blockchain technology, which will make transactions affordable, efficient and considerably faster without the need for a middleman.

Digital Asset CEO Blythe Masters said:

After so much hype surrounding distributed ledger technologies, today’s announcement provides the initial significant evidence that the technology could meet its potential. Collectively, DA and our customer ASX have disclosed that the technology not only functions but might satisfy the demands of mission-critical financial infrastructure


Author's Bio: 

Ricky Is the Co-Founder of Unkrypted, a platform which provides the latest news and information that helps to understand everything about the ever-evolving world of digital currencies.

He is also the founder of Absoltz- a full premier digital marketing agency in Sydney, Australia. He is been fascinated by Blockchain technology since the first time he heard about it in [2013] and now he is more into the technical aspects of Cryptocurrencies and Block Chain technology