Australian stock exchange says software overhaul will not involve blockchain

SYDNEY, May 19 (Reuters) – Australia’s stock market operator said it will no longer seek to rebuild its software platform with blockchain-based technology, one of the highest-profile rejections of the once-famous concept best known for powering cryptocurrency.

ASX Ltd (ASX.AX) frustrated market participants in November by “pausing” a rebuild of its all-in-one trading, settlement and clearing software based on the decentralized computing concept, after an external review found it had to largely reworked after seven years of development. read more

The company has since said it is considering options for another attempt to rebuild the 30-year-old software, but at a meeting with participants this week it said it would not involve blockchain or related “distributed ledger technology” (DLT).

When asked if the next attempt would “go down the more conventional route, i.e. without a focus on DLT (or) blockchain”, exchange project director Tim Whiteley said at the meeting that “while we continue to explore all the options, we will certainly need to use a more conventional technology than in the original solution to achieve the business results”.

The ASX provided Reuters with a recording of the May 17 meeting.

The statement signals the end of what would become one of the world’s most prominent use cases of the concept that promises to accelerate online transactions by securely processing them across multiple locations.

Until now, the ASX has said it could revive the project using blockchain-based technology developed by New York-based entrepreneur Digital Asset. It has said it will announce a new strategy for the project by the end of the year.

Digital Asset, in which ASX bought a small stake after hiring it to rebuild its software in 2016, was not immediately available for comment.

Whiteley told the meeting that the ASX was on track to decide on a new strategy by the end of the year. It sent a request for information to potential software vendors and “issued an RFP to a number of vendors that responded more positively … for more detailed feedback,” he said, using the acronym for a request for proposals.

Market participants had told the ASX they did not want a risky one-date transition to new software and “that feedback has been factored into the implementation planning”, Mr Whiteley said.

Reporting by Byron Kaye; Editing by Christopher Cushing

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