In context: Blockchain technology has often been described as a solution in search of a problem. Blockchain certainly won't be a solution for the Australian stock market, as the market-controlling company has decided to follow alternative update pathways for its platform.
Australian Securities Exchange (ASX) Ltd has recently confirmed that a proposed plan to rebuild its software platform on a blockchain solution is no more. The "blockchain revolution" is once again postponed, at least Down Under, even though the need for a radical software upgrade remains.
In November 2022, ASX said it was pausing the planned blockchain-based rebuild of the software system currently managing all-in-one trading, settlement, and clearing operations. The company made the decision after an external review confirmed the system had to be rewritten from scratch. At that point, the new decentralized, cryptographically verified network system had been in development for seven years already.
ASX is still using its 30-year old software to manage the average daily turnover (A$4.685 billion) and whole market capitalization (A$1.6 trillion) of one of the world's top 20 stock exchange groups. According to a recording of a recent meeting with companies involved in the upgrade project, ASX is now considering different options for a new rebuild attempt while completely discarding the "distributed ledger technology" of the blockchain.
Australian Exchange director Tim Whiteley said the second rebuild attempt will need to use "a more conventional technology" than the revolutionary one originally proposed. In order to achieve the "business outcomes," Whiteley said, the blockchain must be abandoned to its own sad, prolonged demise.
Digital Asset, the company hired by ASX to rebuild the Australian exchange software platform in 2016, didn't provide any comment on the new turn of events. The New York-based organization is now seemingly designing a new upgrade strategy which will be announced by the end of 2023.
Meanwhile, ASX is seeking new ideas and potentially new business partners. The company has sent a request for information to other software vendors, and it even sent a "request for proposal" (RFP) to some of those vendors for more detailed feedback about their proposal. Whiteley also said ASX received feedback from market participants, as no one is seemingly interested in a "risky, single-date changeover to new software" anymore.