ASX blockchain upgrade of CHESS ‘is costing members millions’: industry body
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Judith Fox, CEO of the Stockbrokers and Financial Advisers Association, says that a blockchain overhaul of the Australian Securities Exchange’s ageing CHESS post-trade system is costing her members’ millions.
“Many of our members are spending millions of dollars in order to be able to interact with the new distributed ledger technology that the ASX is implementing,” Fox said.
She was speaking during a parliamentary hearing on Friday, as reported by the Australian Financial Review on Sunday.
The new blockchain-based upgrade of the long-in-tooth CHESS (Clearing House Electronic Subregister System) is designed to speed up the ASX’s clearing and settlement times and reduce counterparty risk.
According to the AFR report, Fox argues members, who aren’t only in the business of providing industry advice, are connected in some way to the ASX and “other global exchanges.”
“The investment required to operate in global markets is getting more and more intense,” said Fox.
The CHESS system is currently 25 years old. The new blockchain iteration has been facing a somewhat rocky road to development and implementation, but is scheduled to finally be in place by mid 2023.
Last month, at the virtual Macquarie Technology Summit, Australian Securities Exchange boss Dominic Stevens was in a bullish mood about the blockchain upgrade.
“We are moving two to three trillion dollars of securities onto this system,” said Stevens in one of the conference’s online sessions. “That is larger than the whole global crypto world [has] sitting on the blockchain.”
The total market value of all cryptos is currently about $US1.28 trillion, a decline of almost 50% since its peak of US$2.16 trillion in May.