Australian Security Exchange (ASX) is set to become the first exchange in the world to adopt blockchain technology in processing equity transactions to replace the current CHESS (Clearing House Electronic Subregister System).
This is after Friday, December 8 announcement from the company that it will implement the new system at the end of March next year.
The distributed nature of blockchain will help lower costs, quicken transactions and improve security. It will also empower customers’ direct interactions in addition to messaging.
ASX Managing Director and CEO Dominic Stevens said,
“ASX has been carefully examining distributed ledger technology for almost two-and-a-half years. Including the last two years with Digital Asset, in order to understand its potential application. Having completed this work, we believe that using DLT to replace CHESS. It will enable our customers to develop new services and reduce their costs. Besides it will put Australia at the forefront of innovation in financial markets. While we have a lot more work still to do, today’s announcement. It is a major milestone on that journey”.
The company said it has researched and tested the technology for two years. Since partnering with Digital Asset to see through the transition. Digital Asset is a consulting company that helps financial institutions in adopting the new technology.
It will join other exchanges adopting this technology, including Nasdaq, The London Stock Exchange, and the Japan Exchange Group.