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The Australian Securities Exchange (ASX) said Tuesday it will again delay the rollout of a blockchain replacement for its aging settlement system by at least two years and has hired IT consulting giant Accenture to review the project’s status.
ASX’s CHESS replacement project, designed to supersede its decades-old system for settlements and clearances on its platform, is now expected at least until late 2024, ASX said in a statement.
It’s yet another setback for the exchange which has faced several delays spanning at least three years over plans to implement a distributed ledger-based replacement.
The implementation of a blockchain or distributed ledger-based system would mark Australia as one of the first countries in the world to adopt the tech for a traditional exchange.
Major securities exchanges including the Nasdaq, the Japan Exchange Group and the London Stock Exchange are also exploring options to implement blockchain technology for order book settlements and clearances.
Yet the technical implementation and adoption of the tech have proved to be a challenge in Australia. ASX said both itself and application software provider Digital Asset had identified more development being required than previously anticipated in order to meet the exchange’s “scalability and resilience requirements.”
Those requirements have contributed to ongoing delays in the delivery of the final technical components for the replacement, the exchange said.
High Hopes for DLT
Helen Lofthouse, who replaced Dominic Stevens as ASX’s Managing Director and CEO at the beginning of August, has expressed support for the replacement project, prompting an independent review to assess the remaining deliverables, ASX said.
Dublin-based information technology services and consulting firm Accenture is expected to conduct the review of the new CHESS application to identify the system’s shortcomings.
“Several consultancies were assessed,” a spokesperson for ASX told Blockworks via email. “Accenture was selected as having the most contemporary and relevant expertise and current skills with Daml and distributed ledger technology (DLT)”. Daml is a private, scalable smart contract language for DLT, blockchain and databases.
The spokesperson also told Blockworks that ASX has engaged Ernst & Young, another IT consulting firm, to assess the terms of reference for the review to “ensure appropriate governance arrangements are in place.”
Accenture’s review is expected to identify necessary actions for ASX to communicate a revised timetable on when exactly the project will be completed, the exchange said.