ASX cancels years-long blockchain settlement and clearing system project

Quick Take

  • The Australian Securities Exchange (ASX) is dropping a long-in-the-making blockchain-powered replacement for its CHESS settlement and clearing system.
  • The project was first announced in 2017.
  • The cancellation will result in a A$245-255 million ($165 million-$172 million) write-off. 

The Australian Securities Exchange (ASX) is dropping a long-in-the-making blockchain-powered replacement for its CHESS settlement and clearing system.

The announcement caps a process subject to delays and controversy that once appeared to be an early win for enterprise adoption of distributed ledger technology. ASX announced in 2017 that it had tapped blockchain startup Digital Asset Holdings to develop the system to replace CHESS. 

ASX will "will reassess all aspects of the CHESS replacement project following completion of an independent review, conducted by Accenture, and its own internal assessment," according to a press statement. 

"The CHESS replacement capitalized software will be de-recognized in light of the solution uncertainty, resulting in a charge of $245-255 million pre-tax ($172-179 million after tax) in 1H23. This will have no impact on dividends," ASX said.

That translates into  a pre-tax charge of $165 million-$172 million at today's exchange rates.

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