Australian Securities Exchange Delays Blockchain Roll Out

Australian Securities Exchange (ASX) has again delayed its Blockchain transition, because of uncertainty about the impact of the global COVID-19 pandemic.

25 March, 2020 | AtoZ Markets – Since December 2017, the Australian Securities Exchange (ASX) has been developing a blockchain infrastructure. It will replace its current transaction processing system, known as the Clearing House Electronic Sub register System (CHESS).

COVID-19 Causes ASX to Delay Blockchain Switch

It is expected to go live in April 2021. However, for various reasons, including the uncertainty created by the COVID-19 pandemic, the ASX will now work together in June to delay the deployment.

Other reasons for delaying include feedback on timing, requests for additional functionality, and the ASX also needs more time for development and preparation. However, the exchange said it still aims to deploy the first phase of the industrial test environment in July.

Users already have the full technical documentation necessary for integration. The first code was released almost a year ago, with updates every eight weeks.

This is not the first delay for the project, which started in 2016. At the end of 2018, the ASX postponed the launch from the end of 2020 to the beginning of 2021. ASX stated:

 “In recent days, ASX has received further comments on the ability of users to focus on the CHESS replacement project. Many companies in the sector, including ASX, are operating with a large part of their staff working from home. The possibility of participating in coordinated preparation activities later in the year is unclear. “

ASX hopes to be able better to assess the implications of COVID-19 for its activities, by postponing the finalization of a new implementation schedule until June.

Meanwhile, the new settlement system has sparked controversy, with various stakeholders complaining that CHESS is expanding ASX’s dominance in the Australian sector. The first to complain to the Australian Competition and Consumer Commission (ACCC) was the stock registration companies. It expected that stock register data would be part of CHESS. Computershare and Link Administration made their opposition known during the consultation process and then raised their reaction.

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New Multi-Chain CHESS Replacement System

The Australian subsidiary of market operator Chi-X asked the ACCC to investigate the possible effects of blockchain technology on business activities.

At the time, Chi-X Australia stated that it was concerned that the new multi-chain CHESS replacement system would confer an unfair advantage on ASX. It should be regulated, arguing that:

“There is a significant gap around the clearing and settlement activity of the ASX. And the CHESS replacement project may make it more important.”

ASX has invested more than $ 30 million in its technological partner Digital Asset. More recently, VMWare has joined the project and will provide its distributed ledger VMWare Blockchain. Digital Asset’s DAML is the smart contract language. Unlike other blockchain projects, in the case of CHESS, the exchange exploits the golden source node. Others are simple replicas. ASX and technology partners also plan to offer blockchain solutions beyond CHESS.

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