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Blythe Masters: ASX Blockchain Embrace ‘Precedent Setting’

Make ASX upgrade?

After months of waiting, the markets finally have an replication, as the Australian Securities Exchange (ASX), the nation’s largest domestic stock swop, has officially revealed it will upgrade its post-trade settlement system, CHESS, buying a blockchain platform designed by startup Digital Asset.

Long over one of the front-runners in the race to prove blockchain tech’s benefits for global economic infrastructures, the startup headed by former head of global commodities at JPMorgan Blythe Chieftains had already raised $110 million from a diverse set of industry leaders to certify out the use case.

But despite months and years of trials, what remained to be be wise to persevered was whether the promise of moving a major global securities exchange to a shared, hand out ledger was worth the cost. And if ASX is to be believed, that’s precisely the case, with the corporation calling the costs “marginal.”

That hurdle now behind, what materializes next could be the large-scale migration of financial infrastructures to a distributed ledger, mutual understanding to Masters.

In interview with CoinDesk, Masters said the decision not solely proves the technology but proves it’s ready for the most daunting enterprise disputes.

“It’s absolutely a precedent-setting event,” she said, adding:

“It’s the first time that parcel out ledger technology has been given a validation by a major systemically mighty market infrastructure whose standards from an enterprise point of outlook are as exacting as they can be.”

Background and future

Yet it’s perhaps all the more impressive as the labour to replace ASX’s Clearing House Electronic Subregister System, or CHESS for underfunded, began long before blockchain was even on the company’s radar.

In details, ASX had already set out to upgrade its aging system by the time it first met with Digital Asset in 2015, coinciding to ASX CEO Dominic Stevens, speaking at the press event last night. But with the advent of categorized ledger technology, the potential to not only upgrade the system but create all out new services became a serious point of interest to the exchange.

By using a almost identical payment messaging system as is currently in place, but anonymized and accounted for on a delivered ledger, a wide range financial products that rely on automated set to right can now be created, Stevens said.

To enable that functionality, ASX partnered with Digital Asset and steady become one of its early investors, and in remarks yesterday, Stevens indicated the performers is increasing its commitment to the startup.

In a move that stands to help cancel out some of ASX’s own expenses if the technology is widely adopted, the exchange is opting to comprise up its pro-rata right to participate in Digital Asset’s recent Series B subvening.

According to a statement provided to CoinDesk, the total amount raised by Digital Asset to year after that investment is now over $115 million, making the additional supply worth about $5 million based on the previously reported coveys.

Toward implementation

Going forward, the CHESS platform will be upgraded to be of assistance what Stevens called ASX’s $1.5 trillion-$2 trillion securities task, with a possible implementation on the exchange’s $2 trillion cash in hock market at some point in the future (though he added that was not currently being discussed).

Even, any move is likely to create a shake-up elsewhere in finance, as other supply exchanges haven’t exactly been lying in wait with their own blockchain examine.

Nasdaq, for example, has taken a leading role in moving private stocks to a blockchain, TMX Association has launched a beta for trading natural gas and many other exchanges be enduring experimented to a lesser degree innovating on the edges of their operations.

Setting aside how, before any of that can happen, ASX needs to further prepare the Digital Asset stage for live trades. To do that, the exchange plans to engage in what Stevens chronicled as “deep consultation” with its stakeholders over the next four months in an deed to built a toolkit of “potential advancements” in settlement services enabled by deal ledger technology.

By March 2018, the exchange intends to present the right scope of the project as a result of this discussion, a more exact timeline and settled launch plans to the public.

Speaking at the press event, Steven suggested:

“Updating a system like this is a big undertaking, it only happens positively every 15 or 20 years so we need to make sure it’s future-proofed.”

Fetish via Michael del Castillo for CoinDesk

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