ASX, or the Australian Securities Exchange, is in the process of replacing its 25-year-old CHESS platform with a new blockchain-based system referred to as DLT. This change was announced in 2017, and ASX says that the switch to DLT will allow both issuers of stock and investors more confidence and control in the market they trade-in. The growing popularity of blockchain can be attributed to its flexibility and its ability to respond to changing markets both locally and worldwide.
Blockchain technology as a whole has been praised for its system’s heightened security and safety factors for users. The DLT, technically a blockchain system, has been referred to as a database architectural system due to blockchain often being associated with cryptocurrency systems. ASX, wanting to prepare the users for the change, offers many articles and forums to help ease the minds of the consumers and has hosted conferences/focus groups to ensure the industries are ready for the change of system. They have been hosting working group webinars since May 2020 to discuss the transition from CHESS and answer questions about the migration. In a 2020 conference the then CEO Peter Hiom, who in recent months announced his resignation, stated that one of the main difficulties they were going to face with the switch was trying to reassure people of the trustworthiness of their product. Although considered innovative, changing the technology in which your databases operate is not an extreme change that should create concern.
Due to the impact that the Covid-19 pandemic had on the economy and the challenges that the industry had to face, ASX has had to adjust the implementation plan of DLT, and the launch date is anticipated to be in 2023 which was changed from its initial 2021 release date. Because of this delay, they have been able to better prepare for the launch and have shortened the expected time to fully replace CHESS.
DLT could mean a rise in popularity for the use of blockchains in large databases such as ASX. If they are able to replace CHESS smoothly with minimal issues for their consumers it could encourage other industries to follow suit. Much of the hesitancy behind replacing a current system with Blockchain is the amount of effort it takes to start a new database foundation. With the large effort required also comes the concern of error during the process. While switching to Blockchain will have many long-term benefits, consumers’ minds have to be at ease during the process or the industry could suffer.