The Australian Securities Exchange could save up to $23 billion by using Blockchain / Distributed ledger technologies, its CEO announced Thursday.
Dominic Stevens, managing director and CEO of ASX Limited – the exchange’s operator – explained how using distributed ledger technology (DLT) instead of its existing Clearing House Electronic Subregister System (CHESS), would offer far greater efficiency than CHESS does in transmitting messages and accessing information.
“All day every day, participants send messages back and forth to the CHESS database to make sure they are perfectly reconciled with it. This process is prone to errors and expensive to fix. The databases of participants can also be different, meaning there are multiple versions of software essentially doing the same thing,” he said during a presentation.
With the new system, participants will run nodes instead of sending messages, and connect to the whole database instead of having many “disparate databases,” which will help to eliminate errors. However, those customers who don’t want to run nodes will still be able to receive messages “in a similar fashion to how they do today.”
ASX announced earlier this year that it was looking for feedback on its proposal to use DLT in place of CHESS, and Stevens confirmed Thursday that the exchange is looking to implement the new system by 2020.
The platform is based on technology by Digital Asset Holdings, of which ASX is a partial owner. In the future, it can operate not only for the equities, but potentially also settle of bonds or other asset classes, he said.
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