The largest blockchain project to hit the shelves of the Australian Stock Exchange, writes $170 million

The Australian Securities Exchange (ASX) has halted its seven-year project to augment CHESS, the exchange’s clearing and settlement system, using blockchain after Independent audit Accenture reported the issues.

Developed the ASX CHESS (Clearing House Electronic Sub-Register System) 25 years ago to process securities trades electronically.

according to asxThe project incurred a pre-tax loss of approximately US$170 million (about A$255 million), which the company has written off.

“On behalf of the ASX, I apologize for delaying the CHESS replacement project over several years,” said Damien Roche, Chairman of the ASX. “Today’s decision was taken by ASX Limited and its Clearing and Settlement Committee, and the decision was not taken lightly.”

Today, ASX Limited share price closed on the downside, down 0.182%, according to data from asx.

Replacing CHESS with a blockchain

Since CHESS is decades old, the ASX thought to do just that Raising the level of system and began evaluating replacement options in late 2015.

In January 2016, it selected ASX Digital Asset as its technology partner to develop a similar system using blockchain technology, with the project becoming known as “CHESS Replacement”.

The project faced several roadblocks, including COVID-19, which delayed its launch. In September 2022, Accenture was asked to conduct an independent review of the CHESS replacement project.

Accenture’s independent report identified “significant challenges with solution designs and their ability to meet ASX requirements.”

Six essential questions are presented in a report, including response time and synchronization. As the ASX processes millions of trade settlements per day, any delay(s) will affect its business.

The report indicated that only 63% of the project has been completed.

According to ASX, “Existing activities on the project have been paused while ASX returns to designing the solution.” The company also said that the current chess “remains secure, stable, and works well.”

“Replacing CHESS is a big and complex undertaking,” says Helen Lofthouse, CEO of ASX. “The independent report and our evaluation work confirm several important challenges associated with aspects of the CHESS replacement project.”

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