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ASX Probes Penny Stock Seeking to Raise $15 Million in an ICO

The Australian Securities Exchange (ASX) has launched a probe into an IT firm behind a listed penny stock seeking to raise $15 million via an initial coin offering (ICO) for the launch of a cryptocurrency exchange.

Called Byte Power Group (BPG), the public firm issued a statement on Wednesday with answers to a total of 17 questions raised by the ASX requiring the firm to provide details on its intended token sale, disclosed on July 19.

Based on a release at the time, BPG aims to issue a total of 1 billion Byte Power X Loyalty Tokens (BPX Tokens) and plans to sell 25 percent of the amount to private investors at a price of US$0.06 per unit.

The goal is to raise as much as $15 million for the firm to fund the launch of the exchange, where the BPX Tokens can be further traded and used to offset transaction fees. The remaining 75 percent will be allocated for “pre-registered users of the exchange, company special releases, pre-opening and future marketing drive,” according to the plan.

As BPG aims to become the first publicly traded company in Australia to launch a cryptocurrency exchange via the ICO funding model, the move sparked concerns from the ASX over whether it is “in compliance with the ASX Listing Rules.”

On Aug. 1, the ASX’s compliance team sent a letter to BPG, requiring the firm to justify the legality of the planned operation, listing the 17 questions that asked about the status of the ICO, whether it had obtained any legal advice and more.

In today’s written response, BPG said it had already started selling the tokens to private investors in Australia and Singapore with a plan to further roll out the scheme in Hong Kong. It has not responded to a CoinDesk enquiry on how much it has raised so far, or whether any of the 75 percent of the total tokens would be further sold to investors.

In both of the jurisdictions in which it has started selling tokens, BPG claimed it received legal advice that the tokens are not deemed as securities, claiming they are not regulated as a financial product under the Corporations Act of Australian law.

As previously reported by CoinDesk, the Australian Securities and Investments Commission (ASIC) issued regulatory guidance for ICOs in September 2017.

The financial watchdog said at the time ICOs that offer financial products should be regulated under the Corporations Act and gave further details on how it defined such financial products, stating:

“If the value of the digital coins acquired is affected by the pooling of funds from contributors or use of those funds under the arrangement, then the ICO is likely to fall within the requirements relating to MISs [managed investment schemes]. This is often the case if what is offered through the ICO has the attributes of an investment.”

As of press time, the ASIC has not responded to CoinDesk’s request for comment on the BPG case.

It now remains to be seen how the ASX will respond to the letter and whether it will take any action over the listed firm’s ICO activity.

Australian dollar image via Shutterstock

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ASX Postpones Roll-Out of Blockchain Settlement System to Q2 2021

The Australian Securities Exchange (ASX) has pushed back the expected launch time of a blockchain network to Q2 in 2021 that is set to replace the country’s decades-old CHESS clearing and settlement system.

The ASX published a new report on Tuesday in response to public feedback it had gathered that commented on a consultation paper it published in April for the replacement. The company expected at the time the new system would go live by the end of 2020.

The ASX said it received 41 written submissions from various stakeholders in the process, such as clearing and settlement participants, payment providers and market operators.

Based on the responses, the ASX decided to postpone the targeted go-live time to March or April in 2021. It will also extend a user development testing period and an industry-wide testing phase for another six months, respectively, prior to the official implementation.

The reason was due to concerns raised by respondents “whether the proposed implementation window of Q4 2020 to Q1 2021 was achievable given the significance of the technology change and the range of new scope being introduced.”

The ASX went on to explain that “there was a common view in responses that too much new functionality was being proposed to be implemented in too short a timeframe,” adding:

“It was argued that this would result in increased complexity and risk across project phases and in the implementation timeframe.”

As such, seven features of the blockchain system that the ASX initially planned to include at the launch will be released at a later stage, such as settlement in foreign currencies and a reporting feature for showing account balance information.

Further, the ASX cautioned that whether all new features can be made available to users at the launch will also depend on potential risk issues and regulatory clearances.

The ASX has been exploring how to adopt distributed ledger technology since 2015 and announced last year it will launch a blockchain-based settlement system in an effort to cut operational costs and to boost transaction efficiency.

The revised implementation timeline also follows recent remarks made by the exchange’s managing director and CEO Dominic Stevens that the new system is able to save as much as $23 billion once implemented.

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Blythe Masters Looks Beyond Finance for Next Wave of Blockchain Growth

To hear Blythe Masters tell it, the time has come for Digital Asset (DA) to spread its wings and fly.

The distributed ledger technology (DLT) company she founded in 2014 is entering a new phase, heralded by, among other things, a partnership with Google Cloud to simplify and proliferate the tech.

To date, DA’s strategy has stood out among the big enterprise blockchain players for its laser-like focus. Instead of spending a lot of time on consortiums, proofs-of-concept and the like, the New York-based company concentrated on landing the one big fish.

It achieved that goal late last year when the Australian Securities Exchange (ASX) officially hired DA to replace its creaky Clearing House Electronic Subregister System (CHESS), a multi-year project that’s currently underway.

Now, having earned the rare distinction of a bona fide production customer, Masters’ startup wants to foster an ecosystem around its Digital Asset Modeling Language (DAML), which is about to become available with a software development kit (SDK) via Google Cloud.

“Having spent three and a half years in the design-and-build phase, this is the ‘open up and educate’ phase and [the time to] build a community of channel partners and developers,” Masters told CoinDesk.

This, in turn, will open a vast range of opportunities for DA, she said – both within the financial services industry where Masters spent most of her career and outside it.

“The application of this technology is by no means limited to the world’s biggest market infrastructures,” the former JPMorgan Chase executive said, adding:

“It goes well throughout financial services, well beyond capital markets and beyond financial services into all the other industries that have a vested interest in improving the efficiency of their workflow orchestration.”

According to Masters, there is “a lot of pent-up demand” for DA’s technology which the cloud-based DAML SDK can start to meet and a “potential addressable market that is almost unmeasurable.”

To give a sense of the breadth of this market, Masters rattled off a litany of new pastures for DA, including: healthcare and insurance claims; digital media rights; royalty streams; real estate; lending and collateral management within capital markets, derivatives post-trade, securities post-trade, reference data, supply chain, crypto wallet custody of assets and more.

However, Masters was careful to qualify this, acknowledging the fatigue felt in many corners following the blockchain hype of a few years ago.

“I think there was some fair criticism that blockchain was a technology solution looking for a problem to solve,” she said. “But our approach has very much been to work with customers to identify the problem first and sometimes not to recommend a DLT solution.”

‘Web-paced innovation’

The DA team recently returned from San Francisco, where Masters and Shaul Kfir, DA’s CTO, gave a talk on DLT partnerships at the Google Cloud Next conference.

The primary aim of the Google Cloud partnership is to make it easier for developers to deploy DA’s tech, which Masters describes as “a mission to unleash web-paced innovation across multiple industries.”

This means abstracting away the underlying complexity of the cryptography, the data architecture, the blockchain or DLT state engine, said Masters.

The Google Cloud-DA partnership appears to run deep as well as wide. To help drive the DAML platform-as-a-service (PaaS) program, DA has also welcomed former Google engineering executive AG Gangadhar to its board.

And adding to the symbiosis, Google Cloud has joined DA’s developer program private beta, giving Google Cloud developers access to DAML.

The DLT space has garnered extraordinary enthusiasm and Google’s developers and its customers are no less curious and motivated in this space than any others,” said Masters.

It’s now clear Google is getting serious about blockchain following candid comments last month from co-founder Sergey Brin that the search giant was playing catch up with the blockchain trend.

Google would not comment on the partnership or DLT generally, but an insider close to the DA-Google Cloud partnership confirmed to CoinDesk, “All of Google has access to the DAML SDK, and this includes Alphabet,” Google’s holding company, which has portfolio companies in a wide range of industries.

But not every influential figure in Mountain View is a blockchain convert. CoinDesk asked Google’s chief internet evangelist, Vint Cerf, if he thought tokens could perhaps be used to incentivize users and align them with the goals of tech platforms.

Cerf, who was not commenting on the DA partnership but on cryptocurrency generally, replied in a curt email: “Not clear yet. It could just turn into a speculation like tulip bulbs and bitcoin.”

Still, Masters said DA and Google share a common approach to solving engineering problems and “a focus on empowerment of enterprise customers, particularly in the workflow orchestration space that we have in common. So that is where the enthusiasm is coming from.”

Maverick Masters

To be sure, DA is far from alone among enterprise blockchain vendors in trying to expanding its ecosystem.

For instance, IBM and Hyperledger are hard at work exploring what they can do with partnerships. Meanwhile, a recent announcement from banking blockchain consortium R3 talked up the potential for its Corda platform to be interoperable across a wide range of industries.

There has also been an increase in blockchain-as-a-service announcements of late. BlockApps Strato has also been welcomed onto Google Cloud, while Amazon Cloud Services (AWS) recently cemented a partnership with ethereum design studio Consensys in the form of the Kaleido project.

But Masters pointed out that DA has always charted its own course, adding that the company’s strategy remains unchanged.

“It’s where we always intended to focus,” she said, referring to the new priority on building a developer ecosystem. “We just didn’t approach it via the same avenue necessarily as everyone else.”

Aside from ASX, other customers DA has publicly disclosed it is working with are the U.S. clearing and settlement giant DTCC and Dutch megabank ABN Amro.

Another thing enterprise blockchain watchers seem to be interested in is a possible amalgamation between private or permissioned DLTs and public chains, with their fluidity of tokenized assets.  

Asked for her opinion on the nascent token economy and where it might bleed into the enterprise world, Masters said she is “not ruling out tokens by any means.”

She agreed there is lots of good research and development work being done on this, but said the institutional use of enterprise tokens requires enterprise-grade command-and-control infrastructure.

“It won’t be until the kind of controls you routinely expect around transactions and post-trade processing of a stock or bond today can also be produced for the transaction of a tokenized instrument – whether it’s a stock or a bond or a cryptocurrency – that we will see widespread enterprise adoption of tokenized instruments that rely on public chain technologies.”

Ever the hard-headed businessperson, Masters would not be drawn on the merits or otherwise of one DLT architecture versus another, but answered categorically all the same when she said:

What I believe in is our technology. I don’t mix philosophy or religion with technology. I believe in solving business problems using tech in a cost-effective and safe manner.”

Blythe Masters mage via CoinDesk archives 

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Korea's Financial Regulator Wants to Use the Blockchain for Stock Trading

South Korea’s financial watchdog is advocating for a blockchain-based stock trading system.

The Financial Supervisory Service’s (FSS) appeal was part of a new study published by the agency on Thursday, which was first reported on by Korea JoongAng Daily. The study reportedly encourages South Korean regulatory agencies and companies to collaborate on the development of the proposed system, and also examines the use of the blockchain by stock operators around the globe.

The usage of blockchain in stock trading is already well established, with the Australian Securities Exchange (ASX) first trialing distributed ledger tech for its settlement and clearing system, called CHESS, in 2016. ASX said in April that it expects to roll out the new system in 2020.

Likewise, U.S. stock market Nasdaq unveiled a blockchain-based private securities platform in 2017, and the London Stock Exchange experimented with using the blockchain to replace paper trading certificates later that year. The Japan Exchange Group (JPX) also founded a consortium to explore blockchain applications to capital markets infrastructure in 2017.

The study reportedly noted that the exploration of blockchain use cases in Korea has only recently started, and that cooperation between private and public companies would be integral to the success of any future system.

“There should be no barrier between public institutions and private companies in developing a blockchain system,” the FSS was quoted as saying.

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Capital Markets Blockchains Are Finally Getting Go-Live Dates

If minimum viable products (MVPs) have so far proved elusive for companies building blockchain solutions for capital markets, Consensus 2018 marked a notable change in the narrative.

Assembled in New York this week, a handful were even confident enough to give firm timetables for production. For those tired of blue-sky talk, it was refreshing to hear large-scale financial infrastructure projects discussed openly and frankly, in clear terms of where they are and when we can expect to see things going live.

“We are now starting to see at Consensus, examples of where financial services are taking this technology into production with real timelines that they have committed to,” Chris Church, the head of business development at Digital Asset, said.

He told CoinDesk:

“I think that’s a very important proof point for the industry.”

Indeed, DA, a blockchain startup founded by former JP Morgan executive Blythe Masters, has itself been making headway with its overhaul of the Australian Securities Exchange’s (ASX) Clearing House Electronic Sub-register System (CHESS).

Underscoring the seriousness of the undertaking, ASX recently produced an 87-page progress report. Roll-out is targeted for late 2020 or early 2021.

“A lot of people have talked about hype and reality,” Church said. But with the ASX’s commitment, at the end of last year, to replace CHESS with DA’s technology, “we now have evidence that a systemically consequential, highly regulated, national market infrastructure has made the decision to take this technology  to put it into production for their marketplace.”

Church stressed that this project is not simply “adding something on,” but rather, taking out a chunk of the CHESS system and replacing it.

Looking ahead, Church said that DA is now working with a bunch of other financial market infrastructure providers, including exchange groups in all three major regions – Europe, North America and Asia/Pacific.

Though he wouldn’t name names, Church indicated that these conversations were not about doing more proofs-of-concept.

“A science experiment is not what we are interested in,” he said.

In the weeds 

But DA isn’t the only company that’s actually finally getting somewhere with DLT for financial market rails.

For example, the re-platforming of the DTCC’s trade information warehouse is one of the highest profile financial infrastructure blockchain projects bitten off by anyone. Robert Palatnick, DTCC’s chief technology architect, confirmed that coding is expected to finish at the end of this quarter; what will follow and take until year-end, is a complex process of integration, testing and data migration.

Palatnick told CoinDesk:

“It’s exciting, but we are currently in the weeds and learning new and interesting things about working with this nascent technology as we progress.”

He went on to explain that changing to a blockchain isn’t a “magical flip of a switch.” It involves a migration of all the data that is currently in the legacy system into the blockchain before anything can go live.

The enormity of such a project may not be obvious to those unfamiliar with the creaky plumbing of the capital markets.

“It’s hard to explain how you connect to legacy systems, for example, if you don’t have legacy systems,” Palatnick said. “We don’t have any benchmarks to compare to when it comes to blockchain, so while this is unchartered territory, we continue to be pleased with our progress.”

In the third quarter of this year, DTCC expects user acceptance and the migration process to start in earnest, with an expectation of going live in next year’s first quarter.

“We are comfortable we can meet that schedule,” said Palatnick.

Drilling down a little, the very first phase involves running the ledger nodes inside of DTCC’s environment. So firms will not be running nodes themselves in the first instance until the whole challenge of managing those nodes is understood.

At the completion of phase one, DTCC will have nodes set up internally for every firm that it knows will run one, plus some general nodes that will take care of supporting the transactions and processing for the firms that do not wish to support a node of their own.

For this project, DTCC has taken a multi-vendor approach. Ethereum-inspired startup Axoni is providing the technology, with IBM helping to manage the project, and R3 providing best practice guidance on areas like selecting the right data models.

‘Changing a whole industry’

Meanwhile, in Europe, a blockchain project involving the Luxembourg Stock Exchange and a growing contingent of buy-side firms is now scheduled to go live in January 2019. Professional services firm KPMG picked the clearing and settlement of exchange-traded funds (ETFs) on the Luxembourg exchange as a use case for blockchain – which, it turns out, is a very big deal.

Luxembourg is the largest fund management hub outside of the U.S. The jurisdiction holds many trillions of dollars worth of assets under management.

“This is not just about changing the Luxembourg exchange – it’s about changing a whole industry,” Eamonn Maguire, a managing director in charge of advisory banking services at KPMG, told CoinDesk. “The primary netting point, if you will, for funds trading in Europe is Luxembourg.”

Explaining the impetus for such a change, Maguire pointed out that the charging of commissions for the distribution of funds is going to end under the European Union’s second Markets in Financial Infrastructure Directive (MiFID II). The hit to revenue means costs must be cut somewhere. 

As part of its response, Luxembourg is embracing a newer “fintech” approach using apps and mobile devices for direct-to-consumer distribution.

But combining this front-end revamp with blockchains in the back office will mean a roughly 60% reduction in costs for the exchange, said Maguire.

The KPMG-led project includes banks like BNP Paribas, Crédit Agricole and others, as well as over 400 asset managers. The technology used is ethereum-based Quorum, the popular open-source project run by JP Morgan.

KPMG found that Quorum in this private deployment was achieving a throughput of 800 transactions per second, and that would need to be ramped up for production, especially considering Luxembourg’s direct-to-consumer funds-picking model.

Maguire is proud of the magnitude of the project, which started out as a kind of garage idea inside KPMG. He concluded:

“There are different strategies. Sometimes people go for something that’s easier or smaller – but we are not doing that.”

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ASX Exchange Targets 2020 for DLT Settlement System Launch

The Australian Securities Exchange (ASX) is moving closer to replacing its CHESS clearing and settlement system with a distributed ledger-based alternative.

Details about the system’s progression toward production launch were included in an 87-page consultation paper published Friday, which included a timeline for when the switch will be made as well as descriptions of the types of functions it will and won’t support.

ASX is targeting a rollout date sometime in the quarter of 2020 or the first quarter of 2021. But before then, ASX – by way of the consultation paper – is seeking early feedback on its plans as they exist today.

“Depending on the extent of consultation feedback received, ASX expects to provide a final functional scope and implementation roadmap in late July 2018,” the firm explained in the opening of the report.

ASX has been exploring the use of distributed ledger technology (DLT) since 2015. It announced in December that it would become the first major stock exchange in the world to use DLT for post-trade settlement, using technology developed in partnership with Digital Asset, a blockchain startup led by former JPMorgan Chase executive Blythe Masters. ASX also owns a stake in Digital Asset.

ASX’s embrace of DLT is a notable one, coming at the end of a years-long research period. Speaking at the Synchronize conference in New York City earlier this month, CLS Group CEO David Puth said ASX’s move is “going to establish standards by itself” by providing an example for enterprise blockchain implementations across the sector.

ASX deputy CEO Peter Hiom, who was on stage with Puth, suggested that the decision to launch a DLT-based system would help demystify the technology for others in the industry:

“You’re not entering the fourth dimension,” he remarked.

You can read the ASX’s full consultation paper below:

Chess Replacement New Scope and Implementation Plan by CoinDesk on Scribd

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Digital Asset Taps Former JP Morgan Exec for ASX Project

Fintech startup Digital Asset has hired a former JP Morgan Chase executive to work on a blockchain-based clearing and settlement system it is developing for the Australian Securities Exchange (ASX).

Stewart Cowan, formerly the bank’s Asia-Pacific regional head of trading services, will join the firm as a senior product manager, Global Capital reported on Thursday. The startup, which is headed by former JPMorgan executive Blythe Masters, struck a deal with ASX in late 2017 to rebuild its CHESS post-trade settlement system.

ASX came to the decision after building proofs-of-concept and conducting trials over the course of two years, as previously reported.

The securities exchange has also previously invested in Digital Asset, which has long been considered a leader in the enterprise blockchain space.

More broadly, Cowan is the former JPMorgan executive to leave for a blockchain venture.

Amber Baldet, who led the development of the company’s permissioned blockchain platform Quorum, announced her plans to depart and start a new project of her own earlier this month. Details about this venture are scarce.

Baldet’s departure came just weeks after rumors that the banking giant was considering spinning Quorum off into its own independent entity first surfaced. It remains unclear what will happen to the blockchain branch going forward.

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Hong Kong Stock Exchange Looks to ASX for Blockchain Equity Settlement

The Hong Kong Stock Exchange (HKEX) is looking to follow its Australian counterpart in developing a blockchain settlement system.

According to the Financial Times, Charles Li, head of the HKEX, said on Tuesday that the company is currently in dialogue with the Australian Securities Exchange (ASX) to learn from its experience in settling transactions over a blockchain system.

The plan, according to Li, would ultimately be to utilize a blockchain platform to settle stock borrowing and lending, as well as over-the-counter trades, at a reduced cost compared with traditional methods.

While the stock exchange has previously announced an initiative in developing a blockchain-based private market to finance smaller enterprises, Li said technology vendors were not able to lend sufficient support and the HKEX is not interested in taking the effort in-house.

That said, Li still hopes to beef up the exchange’s blockchain efforts by following the technological progress and vendor relationships seen by the ASX.

“Let’s use this cheap technology to do something that doesn’t affect the central order book,” he was quoted as saying.

As reported by CoinDesk, the ASX announced last December that, using technology developed by blockchain startup Digital Asset, it has become the first stock exchange to have shifted one of its main services to a blockchain-based system.

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Bitcoin Takes All? Enterprise Blockchains Need Time, Too

Marc Hochstein is the managing editor of CoinDesk and the former editor-in-chief of American Banker. The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday exclusively to our subscribers.


Last week I described how bitcoin, as a deflationary currency, encourages delayed gratification. Now there’s evidence that bitcoin’s straight-laced twin, enterprise blockchain technology, requires such an attitude as well.

Overshadowed by the bitcoin price action, the enterprise use case  – and one of its most prominent evangelists – scored a major advance last week. But it was a hard-won victory.

After two years of exploration, the Australian Securities Exchange (ASX) decided to replace its decades-old post-trade settlement system with a distributed ledger from Digital Asset, the startup led by former JPMorgan Chase executive Blythe Masters.

That’s right, replace. This is not another pilot or a proof of concept or a sandbox, it’s real production.

Masters called the agreement “precedent-setting,” and it’ll be interesting to see what else her company does with its $115 million war chest after this prolonged and successful courtship.

But the achievement is all the more impressive considering that the ASX was publicly skeptical about the technology throughout the testing process.

Plan B

So skeptical that the exchange had a contingency plan in place, in case it decided Digital Asset’s technology wasn’t suitable.

It probably didn’t help that just months after the partnership with DA was announced, the ASX CEO who had championed blockchain resigned (even though the exchange quickly reaffirmed its commitment to exploring the tech’s possibilities.)

And it almost certainly didn’t help when, about a year into the process, stakeholders started to express disillusionment about blockchain in the Australian financial press.

Despite all these hurdles, Masters’ team won over the ASX.

“We believe that using DLT … will enable our customers to develop new services and reduce their costs, and it will put Australia at the forefront of innovation in financial markets,” Dominic Stevens, managing director and CEO of the ASX, said in announcing the final decision.

Believe. That’s a strong word, one you hear often in bitcoin, but seldom in enterprise blockchain.

Too big to bungle

And perhaps rightly so.

Financial market infrastructure is, to use the parlance of regulators, “systemically important” – too big and too interconnected with the rest of the economy to bet on a buzzword. The careful, deliberate approach ASX took with DA before closing the deal last week was appropriate. If anything, it’s remarkable it took only two years to get this far.

But that, in turn, means others watching and participating in the space are going to have to exercise patience as well. This is not the kind of technology where you can “move fast and break things,” as Facebook famously encourages its employees to do.

Bitcoin’s resurgence this year has embarrassed the know-it-alls who wrote it off two years ago, confidently declaring that the blockchain, not the currency, would take off.

But DA’s big win shows it was also premature to declare commercial blockchains over, as many bitcoiners were understandably tempted to do this year.

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Blythe Masters: ASX Blockchain Embrace 'Precedent Setting'

Would ASX upgrade?

After months of waiting, the markets finally have an answer, as the Australian Securities Exchange (ASX), the nation’s largest domestic stock exchange, has officially revealed it will upgrade its post-trade settlement system, CHESS, using a blockchain platform designed by startup Digital Asset.

Long considered one of the front-runners in the race to prove blockchain tech’s benefits for global financial infrastructures, the startup headed by former head of global commodities at JPMorgan Blythe Masters had already raised $110 million from a diverse set of industry leaders to prove out the use case.

But despite months and years of trials, what remained to be seen was whether the promise of moving a major global securities exchange to a shared, distributed ledger was worth the cost. And if ASX is to be believed, that’s precisely the case, with the company calling the costs “marginal.”

That hurdle now behind, what happens next could be the large-scale migration of financial infrastructures to a distributed ledger, according to Masters.

In interview with CoinDesk, Masters said the decision not only proves the technology but proves it’s ready for the most daunting enterprise challenges.

“It’s absolutely a precedent-setting event,” she said, adding:

“It’s the first time that distributed ledger technology has been given a validation by a major systemically important market infrastructure whose standards from an enterprise point of view are as exacting as they can be.”

Background and future

Yet it’s perhaps all the more impressive as the effort to replace ASX’s Clearing House Electronic Subregister System, or CHESS for short, began long before blockchain was even on the company’s radar.

In fact, ASX had already set out to upgrade its aging system by the time it first met with Digital Asset in 2015, according to ASX CEO Dominic Stevens, speaking at the press event last night. But with the advent of distributed ledger technology, the potential to not only upgrade the system but create entirely new services became a serious point of interest to the exchange.

By using a similar payment messaging system as is currently in place, but anonymized and accounted for on a distributed ledger, a wide range financial products that rely on automated settling can now be created, Stevens said.

To enable that functionality, ASX partnered with Digital Asset and even become one of its early investors, and in remarks yesterday, Stevens indicated the company is increasing its commitment to the startup.

In a move that stands to help offset some of ASX’s own expenses if the technology is widely adopted, the exchange is opting to take up its pro-rata right to participate in Digital Asset’s recent Series B financing.

According to a statement provided to CoinDesk, the total amount raised by Digital Asset to date after that investment is now over $115 million, making the additional fund worth about $5 million based on the previously reported numbers.

Toward implementation

Going forward, the CHESS platform will be upgraded to serve what Stevens called ASX’s $1.5 trillion-$2 trillion securities business, with a possible implementation on the exchange’s $2 trillion cash debt market at some point in the future (though he added that was not currently being discussed).

Still, any move is likely to create a shake-up elsewhere in finance, as other stock exchanges haven’t exactly been lying in wait with their own blockchain research.

Nasdaq, for example, has taken a leading role in moving private stocks to a blockchain, TMX Group has launched a beta for trading natural gas and many other exchanges have experimented to a lesser degree innovating on the edges of their operations.

However, before any of that can happen, ASX needs to further prepare the Digital Asset platform for live trades. To do that, the exchange plans to engage in what Stevens described as “deep consultation” with its stakeholders over the next four months in an effort to built a toolkit of “potential advancements” in settlement services enabled by distributed ledger technology.

By March 2018, the exchange intends to present the full scope of the project as a result of this discussion, a more exact timeline and final launch plans to the public.

Speaking at the press event, Steven said:

“Updating a system like this is a big undertaking, it only happens once every 15 or 20 years so we need to make sure it’s future-proofed.”

Image via Michael del Castillo for CoinDesk

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