The Australian Securities Exchange (ASX) has pushed back its ambitious plans of launching a full-fledged distributed ledger settlement system from 2020 to Q2 of 2021, according to an official report.
Earlier this April, the ASX created ripples in the blockchain space by confirming its intent to integrate blockchain-based systems throughout its financial mainframe. At the time, the bourse published a working paper for replacing its currently used security clearing system.
Based on public feedback and authoritative guidance, the company now expects a DLT-powered system to become operational in 2021, instead of its initial 2020 aim. The release pegs the date at March or April and contains connotations from over 41 parties observing the development, such as clearinghouses and payment providers.
A six-month testing period would occur industry-wide after launch, followed by another six-month period of user development and accessibility tests, prior to the DLT-based clearance system’s official migration.
The primary reason for the postponement, at least for public information, was due to testers’ concerns about the technology’s “range of scope” and the overall possibility of making the switch within a short time, given “the significance of the technology change.”
Respondents also voiced the ASX was over-ambitious in its plans to include a wide array of features for the DLT system in “short a timeframe,” noting:
“It was argued that this would result in increased complexity and risk across project phases and in the implementation timeframe.”
Features Likely Introduced Later
Despite the pushback, seven additional features planned by the ASX are likely to be postponed to a later date–including foreign currency settlement, current account balance information and a slew of other financial services.
The bourse also added that all features may not be available to users after launch, citing regulatory hurdles and potential investor risk. However, the ASX remains firm on its blockchain-based plans to introduce transparency and boost transactional efficiently to the clearing process.
In addition, exchange director and CEO Dominic Stevens believes the system significantly cuts down costs, stating a value of $23 billion in this regard.
Cover Photo by Sam Wermut on Unsplash