The Australian Securities Exchange (ASX) has further postponed the launch of a blockchain settlement system - this time due to uncertainty related to the coronavirus pandemic.
ASX initially expected the new system to go live by the end of 2020. It then delayed until April 2021, and now it has been pushed back to an unspecified later date, according to an announcement on Wednesday.
In June, ASX will conduct user consultation and then finalize the new schedule, per the announcement.
“In light of recent events, ASX is replanning the implementation of the CHESS [Clearing House Electronic Subregister System] replacement system. We are conscious of the importance of providing a new schedule, and the need to get the valuable input of CHESS users,” said ASX deputy CEO Peter Hiom.
“Right now, however, in this environment of heightened volatility and activity levels, the industry needs to focus on day-to-day operations. We will therefore wait until June to consult on the new timetable when we expect everyone will have more time to consider the replan and better assess the implications of COVID-19. We will then announce the new schedule,” Hiom added.
ASX has been working in partnership with blockchain firm Digital Asset to replace its existing decades-old CHESS system for a blockchain-based settlement system for the past three years.
In 2018, it first delayed the go-live schedule based on a common response from stakeholders that “too much new functionality was being proposed to be implemented in too short a timeframe.”
Now, the new launch schedule remains unknown. ASX, however, is still targeting to open the Industry Test Environment (ITE) in July to validate systems, processes, and procedures.
“This will be a significant milestone towards the implementation of the new system and will initially be offered exclusively to back office software developers,” said ASX.
The exchange is also targeting the ITE to be further opened to all users in October 2020, subject to feedback from the June consultation.
“ASX remains fully committed to CHESS replacement. We continue to progress the project, including system development and testing, supporting back office software developers, and assisting users in their readiness activities. The investments we are making in the new system and in distributed ledger technology are for the long-term benefit of the financial services industry and the Australian economy,” said Hiom.
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