The Australian Securities Exchange (ASX), the biggest stock exchange in the country-continent is keeping a close eye on blockchain technology, a recent report revealed.
The CEO of Australia’s biggest stock exchange, the ASX, has revealed that the exchange is considering blockchain technology as the group is due to upgrade its current system for clearing and settlement of trades.
In an interview with the Financial Times, ASX CEO Elmer Funke Kupper said:
We’re having a very close look at this. The timing is almost perfect. Where blockchain can make an enormous difference, we’re having a look at whether this is a way to transform our equity markets.
The ASX currently uses the Clearing House Electronic Subregister System (CHESS), which accounts for 7% of ASX’s annual revenue, at AUD $45 million.
The benefits of a blockchain-based system is clear, with Funke Kupper seeking a system wherein market participants accessing a distributed ledger would have the “flexibility” to finalize payments at a time of convenience.
You want to be able to settle in real time where it’s beneficial and settle later where it is not.
Although a system overhaul is due, he added that the ASX “won’t make a decision for another six to seven months.” The chief executive also stated that the ASX would be open to partnering with other companies in order to develop a suitable distributed ledger.
The most recent comments echo a similar opinion offered by Funke Kupper in October, when he spoke about embracing blockchain technology as a means for a “smarter way of doing things.”
At the time, he claimed:
We’re thinking about whether there are smarter ways to do things – to remove a lot of administrative costs and reconciliation costs from the back end of investment banking and broking, and this is where blockchain could be potentially helpful.
Globally, stock exchanges and trading houses have also been keen on blockchain technology and its applications. The most prominent example is Nasdaq’s Linq, a private blockchain-based platform that allows pre-IPO companies trade among each other.
In November, the London Stock Exchange (LSE) led an effort to create a blockchain group with the working title – ‘Post Trade Distributed Ledger Working Group.’ The LSE sees the benefits of blockchain technology in capital markets and more specifically, with pre- and post-trade solutions.
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Last modified: May 21, 2020 10:36 AM UTC