Australia’s Stock Exchange ASX Axes Blockchain Initiative—for Good

After seven years of development, the Australian Securities Exchange (ASX) has finally abandoned plans to use blockchain technology or related distributed ledger technology (DLT) to revamp the existing Clearing House Electronic Subregister System (CHESS)

At a meeting on May 17, ASX exchange project director Tim Whiteley said that while the exchange continues to explore all options, “we will certainly have to use a more conventional technology than in the original solution to achieve the business outcomes,” Reuters reported Friday, citing a recording of the meeting.

The ASX is Australia’s largest stock exchange, with a market capitalization of more than $2.5 trillion with over 2,200 companies listed on the exchange.

The exchange expects to adopt a new strategy by the end of the year, with Whiteley telling attendees that the company had sent a request for information to potential software vendors and issued a request for proposal to interested parties to get “more detailed feedback.”

The ASX did not immediately respond Decrypt their request for comment.

Australian Securities Exchange CEO: blockchain will soon be the norm

ASX and blockchain

The ASX first announced its intention to replace CHESS with a new blockchain-based system in 2016, with the decision driven by the potential benefits the technology would offer, including increased efficiency, reduced costs, improved security and increased transparency.

The new system was developed in collaboration with New York-based Digital Asset Holdings, with the aim of leveraging a business blockchain permission available only to approved participants.

ASX’s blockchain initiative has gone through extensive testing and development phases, including a successful prototype and a series of industry-wide consultations.

Australia’s Largest Exchange Shelves Blockchain Project, Depreciates $170 Million

The project has been subject to some delays, with the expected launch date pushed back several times before the ASX announced it was halting the overhaul of the CHESS system last November.

The decision came after an independent report conducted by Accenture identified “significant challenges with the solution designs and its ability to meet ASX’s requirements.”

At the time, the ASX said the now-abandoned blockchain initiative incurred a pre-tax loss of around $170 million (~AUD$255 million), which the company had written off.