As of August 26th 2019, the Australian
Securities Exchange (ASX) has signed
a three-party Memorandum of Understanding (MOU) to transition to Distributed
Ledger Technology (DLT). The major exchange expects to be utilizing DLT by the
spring of 2021.
Securities Exchange Using DLT Explained
The ASX currently
manages AU$2 trillion in registered equities and features an average of AU$5
billion processed each day.
Now, the ASX has decided to transition to DLT. ASX has
signed an MOU with fintech firm Digital Asset and VMware to transition its
current exchange platform onto DLT.
The exchange developed and currently uses the Clearing House Electronic
Subregister System (CHESS), which is an electronic book entry register of
holdings of approved securities which facilitates the transfer and settlement
of share market transactions.
Australian companies that are listed on the ASX are obliged
to establish a CHESS subregister, and all equity securities are held through
CHESS is precisely what the ASX wants to move to DLT.
According to ASX deputy CEO Peter
“This new partnership is a very positive development that will help us support a wider range of DLT solutions developed by the industry. It confirms our belief in the potential of DLT as we remain on track to deliver the CHESS replacement system in March-April 2021.”
The new platform began development in 2015, and is said to already
be 30-40% complete in its mission to replace CHESS.
ASX is leveraging Digital Asset’s open-source smart contract-focused
The news comes as security tokens
continue to gain traction across the globe.
Earlier this month, the MERJ exchange announced
the world’s first regulated security token listed on a national stock market.
So far, the nascent security token industry has compliantly raised
$1 billion, with the anticipation of the U.S. SEC’s Reg A+ to
increase that number and unleash the much-hyped added
liquidity of security tokens.
What do you think about the ASX making the transition
to DLT? Will other securities exchanges follow suite? Let us know what you
think in the comments section below.
Image courtesy of the ASX.