The ASX migrating to blockchain for settlement system

The ASX decision to change from its current exchange settlement system to distributed ledger technology (DLT) or blockchain could happen as soon as December.

The exchange has undertaken industry-wide consultations and initiatives to roll out DLT in place of the 20-year-old trading clearing house system, CHESS.

After releasing the 2017 financial year results, ASX chief executive Dominic Stevens said the DLT has the potential to make back offices more efficient and function as a ‘single source of truth’ by removing complexities around reconciling trades.

Deputy chief executive Peter Hiom said, ‘Replacing CHESS with the next generation of platform technology will not only reduce costs and risks for companies, but facilitate innovation in the financial markets.’

Hiom added, ‘A third party has been commissioned to review DLT and in December this year the exchange will decide on whether or not it will proceed with replacing CHESS, albeit further consultation is scheduled in March 2018.’

The ASX is just one of many large financial institutions diving into blockchain technology.