Dec. 7, 2017 (The Ferowich Report) — The Australian Stock Exchange (ASX) has officially become a pioneer in deploying distributed ledger technology to enhance the efficiency of financial markets.
ASX and Digital Asset, led by Blythe McMaster, struck a deal to bring distributed ledger technology (DLT) to Australia’s largest equities exchange. Specifically, the deal promises to revamp how ASX processes trades.
Post-trade processing refers to the procedure that follows the purchase and sale of a security. Upon the completion of a trade, the buyer and seller compare trade details, approve the transaction, and transfer ownership of the security. Since buy and sell decisions can sometimes happen very quickly and human error is present in executing trades, post-trade processing essentially verifies that the details of the trade are accurate.
“Today’s decision follows the successful build of enterprise-grade DLT software for core equity clearing and settlement functions,” as well as “the completion of extensive suitability testing by ASX and DA over the past two years,” the Sydney-based company said Thursday.
Implementing distributed ledger technology “will enable our customers to develop new services and reduce their costs,” said Dominic Stevens, chief executive officer and managing director at ASX.
Implementing DLT with routine operations is the next step for ASX, which ultimately requires coordination with members who drive ASX’s $4.6 billion in daily turnover.
Nevertheless, Blythe Masters, CEO at Digital Asset, told Coindesk the deal is “a precedent setting event.”
“It’s the first time that distributed ledger technology has been given a validation by a major systemically-important market infrastructure whose standards, from an enterprise point of view, are as exacting as they can be,” the former head of global commodities at JP Morgan said.
Integrating payment, clearing and settlement processes with distributed ledger technology has received interest from the United States Federal Reserve for its potential to “reduce or eliminate operational and financial inefficiencies, or other frictions, that exist for current methods of storing, recording, and transferring digital assets throughout financial markets.”
Contribute BTC to support The Ferowich Report’s independent journalism: 1EPaN43RywpRqHTFfuTuZuJhnsPbWg61FW
Contribute ETH to support The Ferowich Report’s independent journalism: 0xEF1aD68879c21bb4092a12D9555B7CF60EbffE0A