The Australian Securities Exchange (ASX) has been developing a blockchain replacement for its CHESS clearing system for several years. However, the project was abandoned.
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 laborious than expected. Testing and implementation of the new system has been delayed several times and was expected to be launched in 2023. Now it was decided to completely abandon the project. Development costs amounted to about $170 million.
“ASX will re-evaluate all aspects of the CHESS replacement project after 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, 245-255 million Australian dollars will be written off as losses. There will be no impact on dividends,” the ASX press release said.
Initially, the new system was supposed to “combine innovation and state-of-the-art technology with safety and reliability.” However, the analysis of the developed solution showed that it “does not meet the high standards of the market and ASX.” Representatives of the exchange emphasized that the blockchain solution has problems with both the technology stack and management.
“The ASX announcement, after years of investment from both the exchange and the industry, is disappointing. ASX should prioritize developing a new plan to build a secure and secure clearing and settlement infrastructure,” said Reserve Bank of Australia Governor Philip Lowe.
Note that stock exchanges around the world are exploring the possibilities of blockchain to create clearing platforms. The development of such platforms was reported by the Tel Aviv Stock Exchange, and the Nigerian Stock Exchange plans to launch a system on the blockchain as early as next year.
Source: Bits
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