Australian Stock Exchange cancels launch of blockchain settlement platform

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The Australian Securities Exchange (ASX) has been developing a blockchain-based replacement for its CHESS clearing system for several years.However, it was decided to abandon the project.

Plans to create a replacement for CHESS were announced back in 2017.But it seems that the development of a settlement system on the blockchain turned out to be much more time-consuming than expected.Testing and implementation of the new system was postponed several times and it was assumed that it would belaunched in 2023.Now it has been decided to completely abandon theDevelopment costs amounted to about $170 million.

"ASX will re-evaluate all aspects of the CHESS replacement project following the completion of an independent review by Accenture and its own audit department.It was decided to cancel the development of software to replace CHESS due to uncertainty about the timing and functions of the solution.As a result, in the first quarter of 2023, the losses will beAU$245-255 million has been written off.There will be no impact on dividends," the ASX said in a press release.

Initially, the new system was supposed to "combine innovation and state-of-the-art technology with safety and reliability."However, an analysis of the solution being developed showed that it "does not meet the high standards of the market and the ASX."Representatives of the exchange stressed that the blockchain-based solution has problems with both the technology stack and governance.

“The ASX statement after many years of investment fromboth the exchange and the industry are disappointing. ASX must prioritize developing a new plan to build a safe and secure clearing and settlement infrastructure,” said Reserve Bank of Australia Governor Philip Lowe.

Note that stock exchanges around the worldare exploring the possibilities of blockchain for creating clearing platforms. The Tel Aviv Stock Exchange announced the development of such platforms, and the Nigerian Stock Exchange plans to launch a blockchain system next year.