Australia’s top exchange says no to Blockchain

The Australian Securities Exchange (ASX) is ditching blockchain technology in a dramatic twist to its software overhaul saga.

According to a Cointelegraph report published earlier today (May 19, 2023), the ASX has decided to scrap its ambitious plans to use blockchain technology to rebuild its software platform. This marks a significant turnaround for the concept, which was once touted as a revolutionary force in the same vein as cryptocurrencies.

Apparently, the ASX had sparked frustration among market participants in November 2022 when it announced a “pause” to revamp its trading, settlement and clearing software built on decentralized computing. An external audit found the project needed significant overhaul after being in development for seven years.

It appears that after the break, the ASX began to look at other options for another attempt to overhaul the software, which is now over 30 years old. However, in a meeting with participants on May 17, the company reportedly stated that it would not include blockchain or any other form of distributed ledger technology (DLT) in its plans.

When asked about the approach for the upcoming attempt during the meeting, Cointelegraph quoted project director Tim Whiteley as saying that while the exchange is exploring all options, they will likely need to resort to more conventional technology to achieve the desired results.

According to Cointelegraph, this announcement marks the end of a project that was expected to be one of the most significant examples of a concept that aims to speed up online transactions through secure processing across multiple locations. The ASX was preparing to become the world’s first stock exchange to incorporate blockchain technology into its core services.

Cointelegraph’s report also mentioned that this endeavor was part of a partnership with New York-based entrepreneur Digital Asset, which provided the technology. The ASX had even bought a small stake in Digital Asset after hiring the company to rebuild the software in 2016.

During the May 17 meeting, Whiteley is said to have told attendees that the ASX was moving towards finalizing a new strategy by the end of the year. Whiteley mentioned that the company had sent out requests for information to potential software vendors and had solicited proposals from interested parties to get more extensive feedback.

Finally, Cointelegraph’s report also said the ASX had received feedback from market participants advocating a less risky approach, suggesting avoiding a sudden transition to new software on a specific date.