$23 Billion: Blockchain Pivot to Bring Big Savings for Australia’s Biggest Stock Exchange

$23 Billion: Blockchain Pivot to Bring Big Savings for Australia’s Biggest Stock Exchange

The Australian Securities Exchange (ASX) has disclosed that millions of dollars in savings could be generated by Australian firms once the exchange migrates from the existing Clearing House Electronic Subregister System (CHESS) to a blockchain technology-based platform.

Currently, it is estimated that the average fee that large investors are charged for clearing and settlement services is approximately 1.2% of the assets. The superannuation industry, on the other hand, incurs costs of approximately $23 billion.

“If the value of what we can deliver by providing an enriched, real-time source of truth information to the industry ultimately allows the industry to offer new services that create only 5% incremental revenue or cost savings to end-issuers and investors, we think it’s absolutely worth pursuing,” the CEO of ASX, Dominic Stevens, said during the exchange’s full-year results briefing.

Simpler, Faster, Cheaper

According to Stevens, adopting distributed ledger technology will make reconciliation processes redundant as participants will be in a position to access the correct data in real-time without having to consult the securities exchange. Additionally, a DLT-based system will reduce risk and costs as well as complexity. Currently, there are many disparate databases and supporting, upgrading and maintaining them is expensive. The adoption of distributed ledger technology will also spur innovation.

“By doing all of this within a highly secure environment where permissioned users have access only to the data that they are entitled to see, ASX is safely liberating the source of truth information in real-time such that it can be used by participants and other providers to build new services across the value chain,” Stevens added. “This will provide tremendous value by being a great business enabler for our customers, and a significant enabler of innovation for issuers and investors.”

One Harmonized Database

Unlike the CHESS platform which has multiple versions of multiple applications programmed in multiple languages residing on multiple databases, the ASX’s DLT-based system will use a standard modeling language for Ethereum-like smart contracts and this will sit on a harmonized database.

So far ASX has spent 3 years researching and developing the technology which is expected to go live in two years. This will make it the world’s first industrial-scale application of blockchain in critical financial market infrastructure. Development of the distributed ledger technology to replace CHESS will be done in collaboration with Digital Asset Holdings, a fintech firm based in New York. ASX Limited owns a 5% stake in the startup.

As CCN reported at the time, ASX initially began considering replacing its CHESS platform with a blockchain-based one in October 2015 when it was headed by Elmer Funke Kupper. Early the following year, the world’s16th biggest exchange announced that it had picked Digital Asset Holdings to develop the blockchain-based system.

Featured image from Shutterstock.

• Join CCN's crypto community for $9.99 per month, click here.
• Want exclusive analysis and crypto insights from Hacked.com? Click here.
• Open Positions at CCN: Full Time and Part Time Journalists Wanted.
20.08.2018 / 02:25 53
IBM Secures $1 Billion Australian Dollar Blockchain Deal IBM Secures $1 Billion Australian
The Australian government has chosen IBM as its central technology partner for the next five years in a deal worth $740 million dollars. The
LedgerX Launches First Bitcoin Savings Account, Provides Fiat-Based Yield on Holdings LedgerX Launches First Bitcoin Savings
LedgerX has announced today that it has launched a bitcoin savings account, perfect for those who want to buy and hodl their assets. Attractive
Australia’s Biggest Stock Exchange Targets Blockchain Integration in 2020 Australia’s Biggest Stock Exchange
The Australian Securities Exchange (ASX) has said it will implement a blockchain-based post-trade system from as early as Q4 2020, replacing the
Hong Kong Stock Exchange Looks to ASX for Blockchain Equity Settlement Hong Kong Stock Exchange Looks to ASX
The Hong Kong Stock Exchange (HKEX) is looking to follow its Australian counterpart in developing a blockchain settlement system. According to the
Australia First, Hong Kong Next? World’s 6th Largest Stock Exchange Eyes Blockchain Australia First, Hong Kong Next?
The Hong Kong Stock Exchange (HKEX) is tapping into the expertise of the Australian Securities Exchange (ASX) in implementing blockchain technology
Hong Kong Stock Exchange Seeks Dialogue With Australian Counterpart For Blockchain Advice Hong Kong Stock Exchange Seeks Dialogue
Hong Kong financial operator looks to the Australian Securities Exchange as an example in Blockchain tech implementation The Hong Kong Exchanges and
Comments (0)
Add a comment
Comment on