Australia’s stock market operator has abandoned plans to rebuild its software platform using blockchain technology, marking a significant rejection of the once-celebrated concept that gained prominence alongside cryptocurrencies.
The Australian Securities Exchange (ASX) caused frustration among market participants in November 2022 when it decided to “pause” the rebuild of its comprehensive trading, settlement and clearing software based on decentralized computing. An external review concluded that after seven years of development, significant rework was necessary.
Following the initial pause, the company has indicated it is exploring alternatives for a new attempt to rebuild its 30-year-old software. However, during a meeting with participants on May 17, it was reported that the company stated it would not incorporate blockchain or any related distributed ledger technology (DLT).
When asked about the approach for the next attempt, project director Tim Whiteley stated during the meeting that while the exchange is exploring all options, it will likely need to use more conventional technology to achieve the desired business outcomes.
The statement indicates the conclusion of a project expected to showcase one of the most notable examples of a concept aimed at expediting online transactions through secure processing across multiple locations.
ASX was poised to be the world’s first securities exchange to adopt blockchain technology in the operation of its core services in partnership with the New York-based contractor Digital Asset, which was providing the technology. ASX bought a small stake in Digital Asset after hiring it to rebuild its software in 2016.
Related: Australian exchanges dispel debanking fears amid Binance saga, but risks loom
During the meeting, Whiteley informed participants that ASX was progressing toward finalizing a new strategy by the end of the year. He mentioned the company had sent a request for information to potential software vendors and issued a request for a proposal to interested parties to get more comprehensive feedback.
ASX received feedback from market participants expressing their preference for a less risky approach, avoiding a sudden transition to new software on a single date. Whiteley acknowledged that this feedback had been considered in the implementation planning process.
Magazine: Australia’s world-leading crypto laws are at the crossroads: The inside story