ASX’s Failed CHESS System Blockchain Upgrade Sparks Blame Game

Digital Asset Attributes ASX’s Discontinuation of Blockchain Plans to Them

Digital Asset, the New York firm behind the Australian Securities Exchange’s now-defunct blockchain-based clearing system, has attributed the exchange’s decision to discontinue its blockchain plans to them.

In response, ASX representatives have issued statements to Cointelegraph refuting the claims as being misleading.

For the past seven years, the ASX had been preparing to become the world’s first securities exchange to incorporate blockchain technology, in collaboration with a New York-based company. Yet, on May 17, ASX declared that it would be reversing its decision and likely opt for more traditional technology.

Eric Saraniecki, a co-founder of Digital Asset, informed the participants of a June 8 parliamentary joint committee on corporations and finance, as per a recent report from The Australian, that there were two main causes of the unsuccessful blockchain upgrade.

Firstly, Saraniecki claimed that ASX was not ready to provide essential test data which would have given Digital Asset the chance to evaluate the performance of the new system more effectively.

He declared his confusion as to why the ASX was so hesitant to provide this important information, which consequently forced Digital Asset to make “guesses without any facts.”

Saraniecki further noted that, despite the ASX’s public discussion of using a “big bang” approach to replacing its CHESS platform, which is nearly 30 years old, they were simultaneously instructing Digital Asset to maintain certain outdated aspects of the old system. This is said to have caused further tension between the two companies, resulting in the eventual failure of the upgrade’s implementation.

ASX Representatives Refute Digital Asset’s Claims as Misleading

In remarks to Cointelegraph, ASX’s Non-Executive Director David Curran noted that the problem was Digital Asset not being vocal enough about their worries.

Curran stated that he had made it evident to “high-ranking personnel of Digital Asset” and other individuals that if there were any worries regarding the project, there were ways in which they should have been expressed and dealt with.

“Curran added that if they truly thought it was wrong, they had the means to prevent it and voice their concerns. He concurred that this had not been done.”

Curran stated that he was unable to provide much detail concerning this issue as it is still under review.

Helen Lofthouse, Managing Director and CEO of the ASX, stated that the issues encountered in the project were not so much due to the “flexible requirements”, but rather the existing requirements of the system and how they are connected to the process of settlements in Australia.

Lofthouse revealed that the decision to declare a postponement of the upgrade on November 17, 2022 was due to the realization that the initial design of the solution “would not be able to satisfy the current market demands and provide the necessary flexibility.”

A lobby group has suggested that distributed ledger technology could reduce costs in the traditional financial services sector by up to $100 billion annually.

ASX CIO Tim Whiteley Declares No Definitive Decision has been Reached

Although it has been extensively reported that the ASX had totally eliminated blockchain technology, ASX CIO Tim Whiteley told ITNews, an Australian tech outlet, that “no definite decision” had been reached.

“We are still on course to announce a solution design in the fourth quarter of this year, and we are continuing to investigate all possibilities for the solution design,” Whiteley stated.

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