The Australian Securities Exchange has unveiled it is considering the possibility of incorporating the blockchain technology to improve its clearing and settlement system.
The Australian Securities Exchange (ASX), the largest stock exchange in Australia, is in plans to integrate the blockchain within its financial system, the Financial Times reported. The exchange is exploring how to leverage the technology behind bitcoin and is reportedly going to use it for trade risk management and transaction settlement.
The distributed public ledger is being steadily recognized by some of the major banks and financial institutions, who begin to investigate the possible use cases of the technology. Many in the industry are convinced it holds the potential to change the existing financial system.
“We’re having a very close look at this. The timing is almost perfect. Where blockchain can make an enormous difference, we’re having a look at whether this is a way to transform our equity markets. In post trade we have to let go of our assumptions that things are because of the way they are,” Elmer Funke Kupper, ASX’s CEO, told the Financial Times.
Mr Funke Kupper noted that the exchange could team up with other companies while integrating the technology.
“You want to be able to settle in real time where it’s beneficial and settle later where it is not,” he added, saying he stipulates the system would allow network participants to conduct payments at any convenient time.
Once completed, the move will turn Australia into one of the biggest and stable economies using blockchain. According to Mr Funke Kupper, the financial market in the country boasts much more benefits in comparison with other states. The market for equities in Australia is completely dematerialized, what means all equities are available only in electronic form. Besides, there are only 2,500 entities within the country’s financial sector.
Among the other advantages, Mr Funke Kupper noted, is the local registry system used by the ASX. It allows the exchange to keep record of all the actions realized on the market. “In the US they can’t do it. We have a central ‘know-your-customer’ utility that is incredibly powerful. As we own the central securities depository, it allows us to bring everyone along,” he said.
One of the largest Australia-based cryptocurrency mining companies, Bitcoin Group, announced in November that it projects to launch an IPO on the ASX. However, the company had to postpone its plans following requests of the Australian Securities and Investments Commission (ASIC) to submit a report on bitcoin mining. ASIC asked to hire an independent expert to provide detailed information on the process of mining so that investors would be aware of the potential risks behind bitcoin. The enlistment is now planned for the middle of January.
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