Australian Securities Exchange : stock market and blockchain.
Sydney’s stock market, Australian Securites Exchange (ASX), will soon be the first common financial market to adopt the blockchain technology.
The eight largest share-market of the world current system, the Clearing House Electronic Subregistrer System (CHESS), records shareholdings and manages the settlement of share transactions. Despite its advantages, the Australian share market decided to be innovative and be one of the first to use blockchain.
What is blockchain you may ask.
You certainly have heard about cryptocurrencies, such as Bitcoin or Etherum, well their whole system is based on what we call blockchain. It revolves around a ledger that is continuously updated and accessible to the public, allowing the cryptocurrencies to be traded in a decentralized manner. Blockchain guarantees data’s security and transparency, indeed the shared ledger that records transactions is nearly impossible to tamper with, as it uses computers with advanced encryption.
Unlike Bitcoin’s public blockchain, which relies on copies of the shared ledger that are stored on individual computers globally, the ASX’s system will operate on a secure private network where the clients will be known and have the right permission to access the system.
The CEO, Dominic Stevens, believes that the new system will enable customers to develop new services, reduce costs and will “put Australia at the forefront of innovation in financial markets”. The transition fom the CHESS system to the new blockain system, named Distributed Ledger Technology (DLT), will slowly start at the end of March 2018 when the ASX will release more details about the system’s operation.