- Key members of the Australian Securities Exchange (ASX) have urged it to delay the implementation of a blockchain system
- The companies are concerned that not enough clarity has been given about the new system and associated fees
- Implementation has already been delayed for a year by ASX due to the coronavirus
The planned integration of blockchain technology into the systems that power the Australian Securities Exchange (ASX) could be delayed by up to two years after major players voiced their concerns over the short timeline. The new system, which was yesterday delayed until 2021, has been in the works since 2017, but leading companies on the exchange have urged caution, claiming that the project lacks clarity and seems rushed.
Blockchain to Replace 25-Year-Old CHESS System
The ASX announced in 2017 that it planned to replace the existing Clearing House Electronic Subregister System (CHESS) system with one built on the blockchain, citing “a broader range of benefits to a wider cross section of the market” in the new model over the 25-year-old model.
April 2021 had been earmarked as the ‘go live’ date, but a review of the feasibility of this date by the ASX, published yesterday, said that the coronavirus pandemic would necessitate a 12-month delay. However, this integration could be pushed back a further year if some of the big players in the market have their way.
Computer Share Kicks Up a Fuss
According to the Financial Times, one of the chief share registry companies in Australia, Computershare, is seeking a delay to 2023 because of a lack of clarity from ASX in the overhauling of critical systems. Computershare claims it had not been given the requisite technical, operational, and regulatory information as to how the new system would operate or the fees associated with the existing and new services.
The company added that a delay until April 2023 was necessary in order for ASX to address the risks of the implementation, particularly after the complications introduced by the Covid-19 pandemic.
ASX Needs to Get It Right
The use of blockchain technology in such a crucial enterprise would be a huge feather in the cap for the nascent technology, but there needs to be a balance between doing it right and doing it at all. Successful implementation by ASX would represent a key victory in the adoption of blockchain technology, but the negative headlines associated with any failure could set it back years and put off many from trying for some time.