The ASX has delayed its rollout of blockchain — one of the world’s highest profile projects using the cutting edge technology.

Blockchain technology is still coming to the Australian stockmarket, but the timeframe for implementation just got extended by another six months.

Instead of a Q4 2020 rollout, March or April 2021 has now been flagged as the earliest crossover date.

Blockchain first hit the spotlight a few years ago as the technology used to underpin cryptocurrencies such as bitcoin. But it’s increasingly seen as having broader applications such as securing other kinds of online transactions.

The ASX’s project to replace its CHESS system for clearing transactions to a blockchain platform based on distributed ledger technology is regarded as one of the world’s most significant such projects.

If blockchain technology continues to get support from mainstream businesses, the global market could grow from an estimated $US670 million last year to as much as $US10.5 billion by 2023, according to some forecasts.

In May, consultant Deloitte surveyed 1000 tech-savvy executives and found three-quarters believed there was a “compelling case” to use blockchain technology in their businesses.

Several blockchain companies are due to list on the ASX in coming months including Security Matters and Identitii

Here’s the revised timeline of the ASX blockchain roll-out:

Source: Australian Securities Exchange

The ASX said it has modified its rollout plan as follows:

  • Defer implementation of seven new scope items from Day 1 to post-Day 1, and bring forward one new requirement in response to strong representations from respondents;
  • Push back the earliest commencement date for the new system from Q4 2020 to target March-April 2021;
  • Provide an additional six months for user development and testing;
  • Defer commencement of industry-wide testing by six months; and
  • Extend mandatory accreditation by six months.

The changes are based on industry feedback from a consultation paper the ASX released in April.

“A total of 41 written submissions were received, representing the views of a wide range of stakeholder groups,” the ASX said.

The groups included clearing and settlement participants, share registries, and industry associations representing issuers, brokers and custodians.

Among the seven items removed from the day-one rollout (see dot point 1 above), the ASX included a number of settlement features, including foreign currency transactions.

“Many respondents considered the proposed timeline for CHESS replacement to be ambitious given the extent of the new features to be included as part of the Day 1 scope,” the ASX said.

“Some respondents also noted competing demands for resources with other internal projects or market changes.”

The ASX has consistently said it will switch over to the new system on a single cut-over date, rather than a phased rollout.

As a result, stringent testing procedures will need to be carried out in advance to ensure minimal disruptions.

The exchange first announced it would be switching to a blockchain-based settlement system in December last year.

The new technology will replace CHESS (Clearing House Electronic Subregister System) — which is the current platform for clearing, settlement and other post-trade services for Australian stocks.

A short time ago, shares in the ASX were down 0.65% to $67.23 in midday trade. The company’s stock price has risen by more than 20% in 2018.

You can read more in the ASX’s latest consultation paper here.