Category: Investing

After opening for trade on Monday, the Australian Stock Exchange (ASX) was forced to freeze trading for a full 20 minutes after a software issue affected the possibility of trading several securities – apparently all tied to a single order.

The issue prompted the Australian Securities and Investments Commission to express concern over the technical capabilities of the ASX’s aging system – and led them to a possible investigation into the ASX’s ability to comply with its license obligations.

Blockchain Solutions Waiting In The Wings

Luckily for Aussie investors, there are not one, but two solutions lined up to fix the issues stemming from the ASX’s aging CHESS trading systems.

Following an unexpected spike in trading volumes back in March of 2020, the ASX was forced to delay the launch of its DLT (Distributed Ledger Trading) platform.

Dominic Stevens – the CEO of ASX – stated that the trading spike heralded a possible tripling of the volume the new ASX system would be required to carry, forcing the ASX to rethink parts of their projected replacement system.

“Some, including an important back-office systems provider for a substantial part of the market, expressed a preference for an extra six to nine months, which we are including in our deliberations. With the volume explosion we saw in March, we’re now looking at plans to ultimately double or triple that original volume target, which will increase go-live system capacity.”

However, the National Stock Exchange of Australia (NSX), have also been working hard to find a blockchain-based stock exchange solution – and at the beginning of October, they announced the creation of their new platform.

The Digital Exchange Subregister System (DESS) is yet another DLT trading system – developed in tandem with iSignthis – that is waiting for approval from the ASIC to help ease the load on the Australian stock market.

Whether the ASX adopts DESS or its own in-house solution, it is worth noting that both solutions are blockchain-based – hinting that the ASX, like many other Australian institutions, recognizes the viability of blockchain technology.

During the online panel of the Future Of Financial Services 2020 conference, Australian New South Wales Senator Andrew Bragg reaffirmed his support for blockchain technology, stating his belief that it may very well be the solution for regulation and fraud – owing to its traceability.

Andrew Bragg reminded the public that time zones had been a problem for regulatory bodies for a long time – and that blockchain technology is capable of reducing costs in this area.

Staying Competitive In The Financial Domain

The NSW-based blockchain advocate highlighted Singapore’s decision to build the world’s first global data exchange – and stated that Australia will have to take steps to ensure its competitiveness on the global financial market.

“Singapore’s ambition is to build the world’s first global data exchange, and we’re going to have to lift our game to compete with that.

Hong Kong will still be an important gateway to China, but because of the recent turmoil there and the foreign influence laws, they won’t have the same regional headquarter attraction. We would be mad to sit idly by and allow such a lucrative share of the market to lead to Singapore or to Tokyo.”

In order to maintain Australia’s position as a financial powerhouse, Andrew Bragg revealed that a group of 15 experts has been formed. They will brainstorm ideas on how to profit from the waning power of Hong Kong in the APAC sector – and how to remove bureaucratic obstacles faced by Australian businesses.

Last but not least, the senator reminded the audience that becoming a financing center has been a target of the Australian government for years.

Hinting that tax deals may be necessary in order to attract major companies, he added that this could only happen if the government was willing to change some policies – and adapt to new technology.