ASX Considers Using Blockchain Technology To Transform Equity Markets

The Australian Securities Exchange (ASX) is eyeing blockchain technology to use in the country’s financial system for risk management of its market trades, FT reported.

“We’re having a very close look at this. The timing is almost perfect. Where blockchain can make an enormous difference, we’re having a look at whether this is a way to transform our equity markets,” Elmer Funke Kupper, ASX chief executive, told the Financial Times on a visit to London.

“In post trade we have to let go of our assumptions that things are because of the way they are.”

Financial Times reports that despite the growing interest among leading global banks and financial institutions on the tech, no widely-used financial product has been switched to the blockchain.

Kupper emphasized that ASX isn’t rushing to adopt the technology and that a decision would not be made “for another six to seven months”. He pointed to the ASX’s registry system that keeps details of market actors on record.

“In the US they can’t do it. We have a central ‘know-your-customer’ utility that is incredibly powerful. As we own the central securities depository, it allows us to bring everyone along,” he said.

The interest in blockchain technology has been gradually rising in the country. Greg Medcraft, chair of the Australian Securities & Investments Commission, had said earlier this year that the technology had the potential “to fundamentally change our markets and our financial system”.