Blockchain has now penetrated not just the world of Science, it also successfully entered the trade and business industry.
Australia is set to be the first securities exchange to switch to blockchain technology, while other exchanges are also experimenting with similar transitions.
Australian stock market will become the world’s first blockchain-based stock exchange. The Australian Securities Exchange (ASX) announced that it will begin using the tech to clear and settle trades.
This high-profile move has been in the works since January 2016, when the ASX began working with US-based blockchain startup Digital Asset Holdings to develop a blockchain-based system. The exchange will outline its transition to the new technology in March.
Speaking with BBC, Michael McCarthy, chief market strategist for CMC Markets in Sydney, said that the exchange is currently running on a system known as the Clearing House Electronic Subregister System (CHESS), which has been in use for decades. The new system could allow for the savings to the tune of tens of millions of dollars.
The implementation of the tech will help to make clearing and settling transactions less expensive, easier, and faster by removing the third-party middleman that banks currently have to go through.
“After so much hype surrounding distributed ledger technology, today’s announcement delivers the first meaningful proof that the technology can live up to its potential,” Digital Asset’s CEO Blythe Masters said through his press release.
The Blockchain technology is a decentralized method of digitally recording data — in this case, transactions — and verifying them as having occurred.
Instead of the ledger being held on a single computer or server, it is distributed over a network of computers, each having to verify the accuracy of a transaction.
In theory, this makes the ledgers that use the tech virtually unhackable. However, after some high-profile hacks, the development has yet to live up to its promise.
Other major securities exchanges around the world, including the Nasdaq, the London Stock Exchange, and the Japan Exchange Group have also been looking into implementing blockchain technology.