The Australian Securities Exchange, or ASX, had delayed the launch of its blockchain-based alternative to its equities clearing and settlement system. The system will now see itself delayed until at least April of 2023.
Delaying Due To COVID
On Wednesday, ASX had announced the new go-live date, which was extended from the previous launch date established earlier for April of 2022. The project itself had its original launch date set at the end of 2020, but the project had seen multiple delays ever since.
The proposed decentralized system is aimed to replace the CHESS system of the exchange, which is considered a legacy system by today’s standards. The goal of this replacement is to create a more efficient infrastructure, overall.
New Expectations Made For CHESS Replacement
ASX, in its press release, highlighted that the latest delay had its decision made after 100 organizations had given their feedback to ASX. All of these organizations highlighted the damage the COVID-19 pandemic had done to the industry at large.
Dominic Stevens stands as the CEO of ASX, and explained that the exchange decided to listen to the regulators, industry, and its technology partners throughout the project’s entirety. As such, Stevens stated that ASX had recognized the large impact that COVID-19 has done and is still doing on the industry, ASX included. As a result of this, the ASX shareholder has made new expectations for the replacement of the CHESS system.
Higher Levels Of Performance Needed First
As such, ASX highlighted that the stakeholders are actually capable of meeting their ends in order to launch the decentralized infrastructure by April of 2022. Even so, many members are pushing for added functionalities to reduce manual processes, as well as extra industry testing.
In the meantime, the massive amounts of market volatility that was experienced in March mandated that the requirements for exchange infrastructure have now been raised. As such, ASX is currently seeking a higher level of scalability and throughput capacity for its CHESS replacement.
Stevens explained that the capacity, functional scope, scalability, and testing for the CHESS replacement system in current development is more significant than it once was. This is due to it capturing the increase in requirements of ASX and the industry at large, lowering the risk in delivering them. Alongside this, it runs in tandem with ASX addressing expectations laid by regulatory agencies that CHESS should be replaced as soon as it’s possible to be safely done, with the new system needing to meet the market needs as well.