Australian Security Exchange ASX scraps blockchain plans

The Australian Securities Exchange (ASX), Australia’s leading stock market operator, has made a significant decision to shelve plans to rebuild its software platform using blockchain technology. The move marks a notable rejection of the once-much-touted concept that gained prominence alongside cryptocurrencies.

In November 2022, the ASX caused frustration among market participants when it decided to “pause” the rebuild of its extensive trading, settlement and clearing software based on decentralized computing after spending a whopping $170 million on its development. An external review revealed that after seven years of development, significant reworking was necessary.

While the company initially indicated it was exploring options for another attempt to rebuild its three-decade-old software, a recent meeting with participants on May 17 brought clarity. The ASX stated that it would not incorporate blockchain or any related distributed ledger technology (DLT) into its future plans.

During the meeting, project director Tim Whiteley mentioned that while ASX is considering all options for its next attempt, it is likely to use 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 accelerating online transactions through secure processing across multiple locations.

The ASX had been positioned to become the world’s first stock exchange to adopt blockchain technology for its core services. Working with New York-based entrepreneur Digital Asset, ASX bought a small stake in the company after hiring it to rebuild its software in 2016.

During the meeting, Whiteley informed attendees that the ASX was progressing towards finalizing a new strategy by the end of the year. The company has issued a request for information to potential software vendors and sent a request for proposal to interested parties to gather extensive 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.