ASX targets end of year for blockchain powered clearing platform

ASX to decide whether blockchain technology will replace its equity post-trade services platform later this year.

The Australian Securities Exchange (ASX) will decide later this year whether blockchain technology will be used to replace its clearing house electronic sub-register system (CHESS) platform.

Speaking on the analysts call for the exchange operator’s half-year earnings, Dominic Stevens, CEO at ASX, explained the concept has received lots of engagement and participants are ‘very interested’ in the technology.

“I think people are looking for more things upfront and asking what the technology can really do,” he said.

Peter Hiom, deputy CEO at ASX, added the process of replacing the CHESS platform with blockchain technology is complex due to the current wide range of users.

“We recognise there’s a lot of work to do to understand from our diverse set of customers - who have their own requirements for the platform - that we need to work through, so that will take a while,” he explained.

ASX announced plans to replace the post-trade platform with distributed ledger technology in January last year, shortly after purchasing a minority stake in blockchain firm, Digital Asset Holdings.

In August 2016, the exchange completed initial testing of the blockchain prototype which will likely be used to replace CHESS.

An analyst asked the ASX team what the potential changes could be in the post-trade competitive landscape

Stevens replied: “I think people probably want to see where this actually goes or where the technology can take them…. There may be some pressures on clearing revenues but it will take a while until we get an understanding of where the technology is going.” 

ASX reported profits increased 3% in the first half of its financial year to $219 million, with growth across its derivatives, equity post-trade services and OTC markets business units.