Australian Securities Exchange Cancels Blockchain-Based Clearing System at $168M Cost
The ASX said the decision has been taken "in light of the solution uncertainty."
The Australian Securities Exchange (ASX) has cancelled its much-delayed blockchain replacement to its aged Clearing House Electronic Subregister System (CHESS).
The ASX said the decision has been taken "in light of the solution uncertainty" and will incur a charge of AUD $250 million ($168 million) in a statement Thursday.
A report by consultancy Accenture identified "significant challenges" with the the design of the blockchain system, such as uncertainty over how ASX requirements interact with the application and underlying ledger.
"Current CHESS remains secure and stable, and is performing well," ASX said. "ASX will continue to invest in its capacity and resilience."
The planned blockchain system for settling trades was intended to be a replacement for CHESS, which ASX first said it was replacing in December 2017 with the original plan for it to be operational by Q1 2020.
However, the project was pushed back to August 2021 and again until 2022, with ASX citing COVID-related disruption as the cause of the delays.
While the delays drew criticism from both Australia's central bank and financial regulator, the ASX insisted the delays were justified to ensure the blockchain-based system was fit for purpose to handle meet peak capacity.
The ASX is Australia's major stock exchange and has a market capitalization of around $1.55 trillion as of September this year.
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