ASX and HKEX working together on blockchain solution

Posted: 21 March 2018 5:18 pm
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The Australian Stock Exchange is attracting a lot of interest with its advanced blockchain system.

The Australian Stock Exchange (ASX) is lending its blockchain system to Hong Kong Stock Exchange (HKEX), reports Financial Times (FT). The ASX became one of the world's first markets to commit to blockchain technology near the end of 2017, when it announced its intention to use it to clear and settle equities.

HKEX recognised the benefits of the technology earlier, and two years ago began work on a blockchain-based private market for smaller firms to obtain financing. But it ran into a snag in the quickly moving space when its vendors evolved beyond their needs.

"Unfortunately this space changes so much that the vendors we chose… eventually evolved such that they’re not really useful to us, and we’re not interested in doing it ourselves," explained Charles Li, chief executive of Hong Kong Exchanges and Clearing to FT.

Now he says they're in a position "where nobody wants to spend the money to do anything, but where the exchange can come out and say let’s use this cheap technology to do something that doesn’t affect the central order book".

To this end the ASX and HKEX have moved closer together to find a more cost-effective solution to benefit them both, by cutting operating and development costs. The two companies are "developing a much closer dialogue to understand what they’re doing, and sharing information… for sharing vendor relationships," said Li to FT. One of the vendors in question is Digital Asset Holdings, which designed the software used by ASX.

The ASX system might be one of the more up-to-date versions around. It had already undergone two years of testing before it was announced, and it will soon be reaching the transition point, where ASX collects stakeholder feedback and prepares to take the system live.

Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO

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