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Australia’s Biggest Exchange could Save $23 Billion with Blockchain

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It’s common knowledge that blockchain is transforming the way we do business.

Blockchain could Help Save Millions

According to the Australian Securities Exchange (ASX), Australian firms could save up to $23 billion.

That could happen once the exchange migrates from the existing Clearing House Electronic Subregister System (CHESS) to a blockchain platform. Right now, large investors are charged 1.2% of assets for clearing and settlement services. The superannuation industry incurs costs of nearly $23 billion.

“If the value of what we can deliver by providing an enriched, real-time source of truth information to the industry ultimately allows the industry to offer new services that create only 5% incremental revenue or cost savings to end-issuers and investors, we think it’s absolutely worth pursuing,” says the CEO of ASX, Dominic Stevens, as quoted by CCN.

The irresistible allure of blockchain to the ASX

The benefits of a distributed ledger technology are there for all to see in comparison to the CHESS system.

Adoption of these solutions will inject great speed and efficiency into the reconciliation process.  Participants in a transaction would enjoy the uninterrupted convenience of accessing real-time data accurately. They will not need to consult the exchange.

Deploying a blockchain based system will help the system with increased security with reduced risks as well as reducing costs.

Avoidable expenses are also incurred by the exchange in running separate databases which all need periodic maintenance and upgrades.

Of course, blockchain can solve all these. When the exchange embraces blockchain solutions more, it even opens the arena to innovation.

The Clearing House Electronic Subregister System (CHESS) is turning old school

One disadvantage of the CHESS system is that it carries a lot of multiple applications programmed in several languages.

When the ASX adopts a DLT-based system, it would harmoniously use a singular standardized modeling language. This unique language will apply to smart contracts like ethereum all using one database. This will bring great value to both investors and issuers.

 

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