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The new DLT Settlement System is a replacement for CHESS that will make the clearing and settlement process quick, hassle-free and devoid of counterparty risks.
With two to three trillion dollars worth of securities on the DLT Settlement System, the Australian Securities Exchange will house more value than what the current public blockchains hold. On the third day of the Macquarie Technology Summit, Australian Securities Exchange CEO Dominic Stevens confirmed the massive capacity of the still-in-development Distributed Ledger Technology-based (DLT) Settlement System.
The Australian Securities Exchange, set in 1987, is regulated by the Australian Securities and Investments Commission. Owned and operated by ASX Limited, it deals with multiple assets and services including trade in shares, debt securities, derivatives and commodities while also providing trading, settlement, clearing and listing services to its customers.
According to Stevens, the whole idea behind the new system is to introduce a more collaborative ecosystem of blockchain-based data. Their focus is less on customer-facing issues but concerns itself more with the interactions within the ecosystem. The total value of the crypto market currently floats around $1.35 trillion and with the constant reduction in prices, the value might go down in the coming months. Thus ASX’s commitment to holding up to three trillion dollar data will set new records in the world’s crypto markets.
CHESS which stands for Clearing House Electronic Sebregister System has been in use for the last 25 years. Back in 2019, Stevens had confirmed the replacement of CHESS not being a vanity project but an important job as it was responsible for providing upgraded systems to their customers. In the same year, a 3-party MOU was signed by ASX in collaboration with VMWare & Digital Asset to develop a system that would replace CHESS, which we now know as the DLT Settlement System.
The Constant Delay in Launching DLT Settlement System
The decision to replace CHESS goes back to 2017 when ASX confirmed the same and announced to launch its replacement in the first quarter of 2020. Later citing COVID19 constraints, the date was pushed to August 2021. However, in October last year, the transition got delayed again to 2023 and it was justified by citing reasons of security and maintaining load capacity.
The new system will improve the global picture of the Australian Financial System while at the same time boost the overall confidence of investors across the world. 2021 has given a new boost to blockchain-based markets wherein everything from art and merchandise to free lunch is traded on a virtual platform. With the adoption of blockchain for managing their securities trading, the Australian Securities Exchange will not just provide an efficient system but will also enter the developing crypto world to redesign its future. Trust and real-time are the words that can best describe this new system.