The Australian Stock Exchange is developing a blockchain-based settlement system to replace the old CHESS system

According to Coindesk's August 16 report, the Australian Stock Exchange (ASX) released its full 2019 financial report, which describes a settlement system based on distributed ledgers.


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ASX has been very optimistic about blockchain technology, and as early as the end of 2017, it announced the project after several trials. The goal of the DLT platform is to replace ASX's increasingly obsolete Clearing House Electronic Subsidiary Registration System (CHESS) with technology developed by Digital Assets of New York. ASX also appointed Blythe Masters as the project leader.

The exchange said in the announcement that it would create a payment information system similar to CHESS, but would use anonymity technology and billing on a distributed ledger to create a series of financial products that rely on automatic settlement.

ASX's annual report released on Thursday showed that the system will "provide upgrade security, resiliency and performance for post-trade trading systems," and its development work "is proceeding in an orderly manner" and is expected to be completed in 2021. It will also provide new features beyond the capabilities currently supported by CHESS, while adopting a new “National and Global Standards compliant” ISO 20022 protocol (International Standard for Financial Services) for information transfer.

The document writes that organizations can access this upcoming system by hosting their own DLT nodes. According to ASX, this will provide synchronized and standardized data, advanced auditing and data analysis services to licensed participants on the network. It will also allow the market to build "new, innovative" applications on this basis.

ASX also said that the exchange is investigating DLT application use cases that allow for "multi-participation" related to stocks and the like.

In terms of cost, in the fiscal year 2019, ASX invested $75.1 million in infrastructure including DLT systems. This includes work on a new ancillary data center, ASX Net communications infrastructure, a data analytics platform called ASX DataSphere, and accelerated enterprise transaction processing.

Overall, the company said its performance in 2019 was “strong” with revenues of $863.8 million, a year-on-year increase of 6.5%. The basic profit after tax was $492 million, an increase of 7.7% over 2018.

As early as May of this year, ASX stated that it has allowed customers to test the DLT system. Through the Customer Development Environment (CDE), customers can connect to the system through blockchain nodes and experiment with this technology. Once connected to the system, users can design, build, and test system changes, as well as access some new business functions.