The Australian Securities Exchange (ASX) rejected the launch of a blockchain replacement for the CHESS clearing and settlement system from decades until the second quarter of 2021.
The ASX published a new report Tuesday in response to public feedback on a consultation document published in April for the new system. The company expected that the new system would become operational by the end of 2020.
The exchange said it had received 41 written comments from various stakeholders in the process, such as clearing and settlement participants, service providers payment and market operators.
Based on the responses, ASX decided to postpone the go-live period targeted in March or April 2021. It will also extend a test period for user development and an industry-wide testing phase. for another six months before the official implementation.
The reason for the delay was cited as concerns expressed by respondents regarding "whether the proposed implementation window of Q4 2020 at Q1 2021 could be reached by considering the importance of technological change and the range of new objectives introduced."
The ASX went on to explain that "there was a common vision in the answers that proposed too many new features to be implemented in too short a time", adding:
"It was stated that this would have led to an increase in complexity and risk at all stages of the project and implementation time. "
As such, seven characteristics of the blockchain system that ASX initially planned to include at launch will be released at a later stage subsequent, such as foreign exchange regulation and a reporting feature to show information on the account balance.
In addition, ASX warned that the new features that will be available to users at launch will also depend on potential risk issues and regulatory authorization.
ASX is exploring how to adopt the LEDger technology distributed since 2015, announcing last year that it will launch a blockchain-based settlement system in an effort to reduce operating costs and increase efficiency of transactions.
The timing of the revised implementation follows the recent observations made by the chief executive officer and general manager of the Dominic Stevens exchange that the new system will be able to save up to $ 23 billion once implemented.
ASX image via Shutterstock