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Australian Securities Exchange Delays Blockchain Transition Again Amid COVID-19

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The Australian Securities Exchange (ASX) has again delayed its planned transition to a blockchain-powered platform as the replacement for old system amid the uncertainty created by the coronavirus (COVID-19) pandemic that continues to spread around the world.

ASX said it requires more time for system development and user testing.

In August 2019, ASX had expressed its intention to use blockchain in its operations in Australia and New Zealand after teaming up with New York-based blockchain developer Digital Asset and cloud computing software provider VMware.

ASX is developing a DLT-based system to replace the exchanges 25-year old Clearing House Electronic Subregister (CHESS) system. ASX had already delayed the time frame to go-live with the new DLT-based system to March-April 2021 from the initial plan to go-live in the fourth quarter of 2020.

ASX said it is now replanning the implementation timetable for the CHESS replacement system. It has called for formal user consultation in June 2020, while it continues the system development and assesses the implications of COVID-19.

The replan will provide additional time for users to complete their operational readiness activities and to consider the rule changes that accompany the new system, the exchange noted.

It will also increase the time available for back office software developers to familiarize themselves with key aspects of the new system in a production-like testing environment and assist users in their readiness activities.

In June 2020, ASX will seek user input on the new schedule that will move the go-live date from April 2021 to a later date.

In the meantime, the target of opening an Industry Test Environment (ITE) for developers in July 2020 remains intact. ITE will also open for all users in October 2020, subject to June consultation.

ASX commenced the process of evaluating replacement options for CHESS in 2015. In January 2016, ASX selected Digital Asset as a technology partner to develop, test and demonstrate to ASX a working prototype of a post-trade platform for the cash equity market using DLT.

The DLT-based system is expected to bring greater benefits such as better record keeping, reduced reconciliation, more timely transactions, and better quality data.

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