One of the largest exchanges in the world, the Australian Securities Exchange (ASX), has confirmed that they will be integrating blockchain technology and will be utilizing it in a clearing and settlement capacity.
They will be replacing their old system and will be fully running on the innovative blockchain technology.
They will be the pioneer in the stock exchange sector, the first major stock exchange in the world to fully run on the new technology.
This has been a long time coming, the Australian Securities Exchange has been working on this for a while now, spending more than two years on making sure that this technology was safe and much more efficient than their existing one. Working with various proofs of concept and prototypes. They have now just implemented it into their post-trade infrastructure – one of the main functions of the exchange.
The technology was created by a startup based in New York called, Digital Asset. The startup facilitated the creation and implementation of the permissioned blockchain, changing out the current Clearing House Electronic Subregister System (CHESS).
The team over at ASX made the decision to go forward with it after the extensive analysis.
“Today’s decision follows the successful build of enterprise-grade DLT software for core equity clearing and settlement functions, and the completion of extensive suitability testing by ASX and DA over the past two years. The testing confirms ASX’s confidence in the functional, capacity, security and resilience capabilities of DA’s application of DLT to meet the needs of Australia’s financial marketplace and maintain the highest regulatory and operational standards. The testing included two independent third party security reviews of DA’s technology.”
What it means
This is a major move to embracing the technology since the exchange is one of the world’s leading financial market exchanges and are now offering a full suite of services including listings, trading, clearing and settlement, across a broad range of asset classes. This exchange is one of the first exchanges that are open every day and is considered to be a world leader for those who are seeking to raise capital. They have continuously been able to rank among the top five exchanges in the world. They carry a significant market capitalization, sitting at $1.5 trillion. They are home to the top resource, finance, and technology companies.
One of their biggest features is their $47 trillion interest rate derivatives market. It serves as the largest in Asia and is a large player worldwide.
One of the key points is that the network and data center of the Australian Securities Exchange is connected to many leading financial hubs. It makes them strive to be one of the most reliable, fast, efficient, and effective systems in the world. They operate in a top-notch regulatory environment and meet stringent criteria, one of which pertains to their clearinghouses. Their clearinghouses are said to be one of the most secure and well capitalized in the world and play a crucial role in underpinning the stability of the Australian nation’s financial markets.
The company has a wealth of experience and strives to be better on a regular basis.
This shows that they have further faith in the blockchain technology to keep them at their current level of efficiency and to propel them forward.