The Australian Securities Exchange (ASX), Australia’s leading stock market operator, has made a significant decision to scrap its plans of rebuilding its software platform using blockchain technology. This move marks a notable rejection of the once highly-touted concept that gained prominence alongside cryptocurrencies.
In November 2022, ASX caused frustration among market participants when it decided to “pause” the rebuild of its comprehensive trading, settlement, and clearing software based on decentralized computing after spending a whopping $170M on its development. An external review revealed that after seven years of development, significant rework was necessary.
While the company initially indicated that it was exploring alternatives for a new attempt to rebuild its three-decade-old software, a recent meeting with participants on May 17 brought clarity. ASX stated that it would not incorporate blockchain or any related distributed ledger technology (DLT) in its future plans.
During the meeting, project director Tim Whiteley mentioned that while ASX is considering all options for the next attempt, it is likely to employ more conventional technology to achieve the desired business outcomes.
This announcement marks the end of a project that was expected to showcase one of the most prominent examples of expediting online transactions through secure processing across multiple locations.
ASX had been positioned to become the world’s first securities exchange to adopt blockchain technology for its core services. In partnership with the New York-based contractor Digital Asset, ASX acquired a small stake in the company after hiring it to rebuild its software in 2016.
During the meeting, Whiteley informed participants that ASX was progressing toward finalizing a new strategy by the end of the year. The company has sent a request for information to potential software vendors and issued a request for a proposal to interested parties to gather comprehensive feedback.
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ASX took into account the feedback received from market participants who expressed a preference for a less risky approach, avoiding a sudden transition to new software on a single date. Whiteley acknowledged that this feedback had been considered during the implementation planning process.