For the first time in history, the Australian Securities Exchange (ASX) has used the blockchain to record shareholdings and manage the clearing and settlement of equities transactions.
Updating Old Technology
This is tremendous news for Blockchain technology as it is a clear signal that significant institutions find that the technology is indeed as useful as the press has been reporting in 2017.
The Clearing House Subregister System (CHESS) used by ASX currently is going to be hitting the bottom of the garbage pail with the rest of the archaic financial technology from the beginning of the internet.
For the past two years, the new Blockchain technology has been tested for improvements to the old system and is proving more efficient. The new technology for ASX (called DLT) expects to develop new services and reduce costs for clients.
The blockchain used at the ASX is going to be a private version of the public ledger system of Bitcoin. Every client of ASX will first have permission to access the blockchain, then clients will need to comply with obligations to DLT, and individual company nodes will be spread out through many different locations like the Bitcoin network.
Other Plans for Integrating Blockchain in Finance
Big plans are on the rise for major financial institutions and the introduction of distributed ledgers. Currently, NASDAQ is placing its advertising exchange on the blockchain.
This exchange, NIYAX, allows for the buying and selling of advertising assets for a whole host of different companies. Buyers will be able to exchange contracts like futures for the future prices of advertising. Its proof-of-stake (PoS) model is ideal for auditing the exchange, as well. Plans for NASDAQ are currently revolving around placing the securities exchange itself on the blockchain.
Currently, the “Big Four” accounting firms are also experimenting with blockchain technology. Deloitte, for instance, launched Rubix, a blockchain that provides services and decentralized applications. Ernst & Young have made the option to settle invoices with bitcoin.
PricewaterhouseCoopers (PwC) is teaming with Alibaba to create a blockchain that eliminates fraud for food distributors. PwC is also launching a digital asset service that allows for the use of digital currencies in everyday transactions.
Klynveld Peat Marwick Goerdeler (KPMG) now has digital ledger services which allow for “full life cycle support—from strategic qualification and business case development to relevant use-case development, systems and operations integration, and on-going management of a company’s blockchain infrastructure.”
Blockchain and finance now seem to go hand-in-hand as the two allow for perfect clarity in the case of audits as well as the guarding of hyper-accurate ledgers.