While the blockchain technology, albeit slowly and steadily, continues to reshape the traditional mechanisms in the financial industry, the deputy CEO of Australia’s leading stock exchange ASX Ltd. doesn’t view the technology as a game-changer, per a report by Bloomberg published on October 24, 2018.
Not a Radically Different Approach
Earlier this year, The Australian Stock Exchange (ASX) announced that it is set to replace the existing CHESS clearing and settlement system with a distributed ledger technology-based solution. An exhaustive 87-page consultation paper mentioned that the exchange is aiming to complete the migration to a blockchain-based platform by 2020 or at the most, Q1 of 2021.
“We’re not entering the fourth dimension here. It’s a database architecture that lets you do a bunch of things much more efficiently than you can at the moment.”
Nonetheless, Hiom lauded the decentralized nature of the technology stating that it will allow the clients to see ASX’s data. He hinted that it could help establish more trust and transparency in the business-client relationship.
It’s worth highlighting that in September 2018, the ASX announced that it had pushed back the launch date of the blockchain-based clearing and settlement platform from the last quarter of 2020 to Q1 of 2021. The decision to delay the switchover was primarily taken to allocate more time for testing and user development.
Exchanges Steadily Moving towards the DLT
Looking past Hiom’s opinion, an increasing number of financial institutions are considering making a switch to blockchain technology seeing how it offers a slew of benefits that could potentially change the face of traditional finance.
On a more recent note, the Commonwealth Bank of Australia (CBA) was awarded the opportunity by the World Bank to issue and operate financial bonds powered by blockchain technology. This decision by the World Bank is a strong testimony of DLT’s growing exposure among the heavyweight institutions all around the world.