The Australian Securities Exchange (ASX) has formed a new partnership with VMware, a U.S-based software company, to help replace the Clearing House Electronic Subregister System (CHESS). ASX has, since 2015 been working to replace CHESS with a blockchain-based platform.
According to the announcement, ASX had initially partnered with a New York-based blockchain startup, Digital Asset. However, this new partnership saw the three; VMware, ASX, and Digital Asset sign a memorandum of understanding (MOU) to help complete the project.
Through the MOU, the new platform will be based on DAML, an open-source smart contract programming language. Digital Asset created DAML earlier this year.
ASX hopes to have the new platform complete and running by March or April 2021. Reportedly, the new platform is intended to upgrade data sharing between players in the Australian commercial space. As it is, CHESS has been running for the last 25 years with about AU$2trillion ($1.35 trillion) equities registered on its platform. The platform is at the heart of banks and brokers who use it to exchange trading information.
David Campbell, ASX’s general manager of engineering and architecture, explained:
For us, DLT-based (distributed ledger technology-based) CHESS is the next generation of market infrastructure, moving away from the notion of a central database messaging to a distributed database shared with our customers, allowing for real-time source of truth to be shared, while also preserving privacy and integrity.
Additionally, ASX had announced earlier this year that it has set up a new unit dubbed as “DLT Solution.” This solution was aimed at researching ways in which ASX could commercialize its blockchain-based platform that is being created to replace CHESS. ASX deputy CEO Peter Hiom said:
Within the equity market, we are starting to see software vendors thinking about the use of the technology beyond clearing and settlement, and there are some very interested parties outside of equities, and outside the normal business umbrella of ASX, wanting to understand how this technology could be used.
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