ASX ‘blockchain’ system to open new digital horizons, exec says

By providing distributed access to a single, verified source of truth, ASX’s blockchain-inspired system will open up new opportunities to digitise multi-party workflows, according to the exchange operator’s deputy chief executive officer, Peter Hiom.

The ASX’s project to replace its aging clearing and settlement system — CHESS, a COBOL-based system rolled out in 1994 — with a new system based on distributed ledger technology (DLT) is probably one of the highest-profile efforts to employ a blockchain-esque system in a critical production environment.

The new system will be a private, permissioned blockchain with segregated data. As a result, everyone participating in the network will be known and will need to meet certain security standards. In addition, the only data that they will hold in their node is the data which they are a party to, Hiom said during a panel held at VMware’s vFORUM event this week in Sydney.

(ASX and VMware in August said that they had signed a memorandum of understanding to collaborate on DLT initiatives.)

When the CHESS replacement goes live, the only full copy of the ledger will be maintained by the operator of the platform; i.e. the ASX. The new system will involve “segregating data, but synchronising it,” Hiom said.

The ASX executive said that the “secret sauce” of distributed ledgers is that a business can independently verify to itself that what it holds is “the truth, the whole truth, and nothing but the truth”. “You don’t have to go back to ASX to prove it; you don’t have to message backwards and forwards,” he said.

A node operator will know that they hold accurate information and that every other node operator also holds accurate information, and can also disseminate data and synchronise it among multiple parties.

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