Australia is now home to the world's first blockchain-based stock exchange

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ASX managing director and chief executive Dominic Stevens told this morning's briefing that participants will be able to connect in a similar way they do now, with the option to use a new messaging system or directly interact with the distributed ledger.

Blockchain is a method of recording data via a digital ledger of transactions, agreements, contracts or anything that needs to be independently recorded and verified as having happened.

The Australian Securities Exchange (ASX) has become the first major bourse to announce the adoption of blockchain technology-the same kind of tech that underpins the bitcoin cryptocurrency-to record shareholdings and manage the clearing and settlement of equity transactions.

ASX said it is now taking the opportunity to replace CHESS with a next generation post-trade platform using contemporary technology that makes an important statement of embracing change to the rest of the world.


It is touted that blockchain technology is a more efficient and less expensive way to track trades.

They will replace their CHESS system with distributed ledger technology.

The exchange operator has been testing Digital Asset's technology in parallel to the routine running of Chess over the past two years, and in June last year paid $7.16 million to increase its stake in the U.S. startup from 5% to 8.5%. "This development puts Australia at the forefront of digital innovation in financial markets and will strengthen our financial system through greater efficiencies".

Other prominent exchanges that are experimenting with blockchain include the Nasdaq, the London Stock Exchange, and the Japan Exchange Group. IBM meanwhile has already predicted that most banks will adopt blockchain.


It said the testing, done in conjunction with two independent third party security reviews of DA's technology, had proved the "capacity, security and resilience capabilities" of the new system.

Blythe Masters, Digital Asset CEO, said, "After so much hype surrounding distributed ledger technology, today's announcement delivers the first meaningful proof that the technology can live up to its potential". The network will be permissioned (private) and the system will be designed without access barriers to non-affiliated market operators and clearing and settlement facilities.

Stevens said the ASX has been examining DLT for nearly two-and-a-half years, including the last two years with Digital Asset in order to understand its potential application, and has used independent third-party security to review the new technology.

And ASX said the new system would save money going forward.


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