The Australian Securities Exchange (ASX) has scrapped its multimillion-dollar blockchain project, one that was used globally as an example of the world’s first, actual industrial-scale blockchain use case.
Blockchain is, well, it’s a controversial technology. It underlines the function of cryptocurrency and outside of a few supply chain applications, it has been failing to prove its validity over something like a database.
That’s why the ASX project was so important to the blockchain world.
The ASX in 2016 announced it was going to building a new post-trade solution using blockchain technology. The solution would replace its legacy Clearing House Electronic Subregister System (CHESS) platform, which has been running for around 25 years.
It’s a complex bit of kit, but CHESS essentially performs all the core clearing and settlement functions of the Australian cash equities market. Big money moves through this thing each day.
The project was originally slated for go-live in April 2021, but with COVID as its excuse, the ASX pushed the blockchain project out to April 2022. It then revised the target to 2023.
I have been following this project for years (most of the links in this article are from the previous publication I wrote for), but what stands out to me the most here is that the industry really rallied behind this project. The ASX wanted fintechs and the greater financial services ecosystem to benefit from the CHESS replacement project. And, as I have said a few times already, it was the biggest example of a proper use case for blockchain.
Today, however, the Australian Financial Review is reporting the ASX has decided to scrap the CHESS replacement project. That is, throw the whole thing in the bin. $250 million, and seven years of work later.
According to the AFR, the ASX scrapped the blockchain project “after a devastating report from Accenture identified a range of issues, including uncertain timelines, communication problems with technology vendor Digital Asset and excessive complexity”.
The report from Accenture came after the ASX’s fifth delay.
It found, basically, that the project was only 63 per cent done, with the ASX admitting “The path we were on will not meet ASX’s and the market’s high standards. There are significant technology, governance and delivery challenges that must be addressed”.
We’ll be sure to let you know when another actual use case for the tech comes along.