ASX has invested USD 150 million in blockchain share settlement system so far – Ledger Insights
As part of its annual results announcement, the Australian Securities Exchange (ASX) revealed it spent A$216 million ($150 million) to the end of June on the blockchain replacement of its CHESS settlement system. This figure covers all work since 2016, but does not include the investment in software developer Digital Asset. The project is expected to start at the end of 2024 at the earliest.
The ASX owns a 5.4% stake in Digital Asset worth $34.6 million ($24 million), valuing the startup at $443 million. The ASX said it carries the holdings at fair value based on Digital Asset’s latest funding. Japan’s SBI made a small investment in May. Before that, the startup raised $120 million in Series D funding a year earlier, bringing its total funding to $307 million.
Digital Asset’s DAML smart contract language is used for the CHESS application with VMware Blockchain providing distributed ledger technology (DLT).
Accenture CHESS Code Review
Earlier this month, new ASX CEO Helen Lofthouse announced the latest launch delay for CHESS and a new Accenture review of the application code. Today, she clarified that the goal is to review areas of the application that present scalability and robustness challenges, propose solutions and recommend a new timeline.
“I am disappointed that we have extended the timeline to go live for a third time. I know our customers are also disappointed. But we all agree that the system has to be right, Lofthouse said.
An analyst from JP Morgan asked if there is a risk that the project will not be completed and the size of this risk. Lofthouse was reluctant to comment until the review by Accenture was complete.
“But I want to emphasize that we have the distributed ledger technology and a really significant amount of that software working in the test environment at the moment,” Lofthouse said. “And we have customers and software vendors who have access to it and use it and test it.”
She continued: “The challenges we’ve communicated have really been some specific areas in the application code where we have challenges meeting the scalability and robustness requirements of the Australian market going forward. And those are the specific areas we drill into in the review. Beyond that, we’ll have to wait until the end of the review to find out what that means in terms of a new timeline.”
Asked if there is a plan B, Lofthouse emphasized that while the current CHESS system works well, “it absolutely needs to be replaced. So we will replace it. This review is just working through some of the details of the challenges we have with the project. »
Speaking more generally about technology work during the results announcement, Lofthouse said: “It’s important to note that the process of changing technology comes with its own risks. But the biggest risk is doing nothing.”
