ASX dumps its $250m blockchain SHESS project in the bin

The Australian Securities Exchange (ASX) has scrapped its multi-million dollar blockchain project, one that was used globally as an example of the world’s first actual industrial blockchain use case.

Blockchain is, well, it’s a controversial technology. It underlines the function of cryptocurrency, and outside of a few supply chain applications, it has failed to prove its validity over something like a database.

That’s why the ASX project was so important to the blockchain world.

The ASX announced in 2016 that it would build a new post-trade solution using blockchain technology. The solution will replace the older Clearing House Electronic Subregister System (CHESS) platform, which has been in operation for around 25 years.

It’s a complicated set, but CHESS essentially performs all the core clearing and settlement functions of the Australian cash share market. Big money moves through this thing every day.

The project was originally scheduled to be operational in April 2021, but with COVID as an excuse, the ASX pushed the blockchain project out to April 2022. It then revised the target to 2023.

I’ve been following this project for years (most of the links in this article are from the previous publication I wrote for), but what stands out to me the most here is that the industry really rallied behind this project. The ASX wanted fintechs and the wider financial services ecosystem to benefit from the CHESS replacement project. And, as I’ve said a few times already, it was largest example of a proper application for blockchain.

However, today the Australian Financial Review reports that the ASX has decided to scrap the CHESS replacement project. That means throwing the whole thing in the trash. 250 million dollars, and seven years of work later.

According to the AFR, the ASX scrapped the blockchain project “after a damning report by Accenture identified a number of issues, including uncertain timelines, communication issues with technology provider Digital Asset and excessive complexity”.

The report from Accenture came after the ASX’s fifth delay.

It basically found the project was only 63 per cent complete, with the ASX admitting that “The path we were on will not meet the high standards of the ASX and the market. There are significant technology, management and delivery challenges that must be dealt with”.

We’ll be sure to let you know when another actual use case for the technology comes along.