May 19, 2023

ASX Abandons Blockchain Rebuild Plan

Australia’s stock market operator has put a halt to plans to rebuild its software platform using blockchain technology, in a move that has been met with some disappointment by those in the web3 space.

The Australian Securities Exchange (ASX) announced in November 2022 that it was taking a pause in the rebuild of its comprehensive trading, settlement and clearing software, based on decentralized computing. Following an external review, it was determined that a significant rework was necessary.

At a meeting with participants on May 17, ASX revealed that the company would not be incorporating blockchain or any related distributed ledger technology (DLT) into the next attempt. Project director Tim Whiteley explained that the exchange was exploring all options, but that more conventional technology would likely be needed to achieve the desired business outcomes.

This decision marks the end of a project that was expected to be one of the most notable examples of a concept aimed at expediting online transactions through secure processing across multiple locations. ASX had bought a small stake in Digital Asset, the New York-based contractor providing the technology, after hiring them to rebuild its software in 2016.

At the meeting, Whiteley informed participants that ASX was progressing towards finalizing a new strategy by the end of the year. They had sent out a request for information to potential software vendors and issued a request for a proposal to interested parties to get more comprehensive feedback.

Market participants had expressed 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 taken into consideration in the implementation planning process.

The rejection of blockchain technology for the ASX software platform is a significant blow to the web3 space, which has seen a surge in popularity in recent years. Non-Fungible Tokens (NFTs) have become a popular way to promote and sell digital assets, with many companies turning to NFT marketing agencies and social media platforms such as Twitter to help promote their products.

However, the ASX decision serves as a reminder that while blockchain technology has the potential to revolutionize the way we do business, there is still a long way to go before it is accepted by major institutions. With the ASX now exploring other options, it will be interesting to see which technology they ultimately choose to rebuild their software platform.

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