Yesterday (October 25), Bloomberg published an article “Stock exchanges building blockchain is not hype”. The paper suggests that ASX, Australia’s leading stock exchange operator, plans to launch blockchain technology for clearing in 2021. That doesn’t mean it’s building hype around the new system.

Australian Stock Exchange; ASX was established in 2006 through the merger of the Australian Stock Exchange and the Sydney Futures Exchange, headquartered in Sydney. The report states that while blockchain (a distributed ledger technology) will soon replace ASX LTD’s aging CHESS system as part of the upgrade, Deputy CEO Peter Hiom does not see the new version as a radically different approach.

“We’re not going into a fourth dimension here,” Hiom said in an interview. “It’s a database architecture that allows you to do a whole bunch of things more efficiently than you can do today.” “There’s a blockchain that’s synchronizing with my data store, but the data store itself is the database that exists now, and it’s a very clever architecture, but it’s just a database architecture, and it doesn’t sound very sexy when you say it like that, but that’s what it is.” Hiom said. The innovation, he adds, is simply a decentralised ledger that allows customers to see ASX data. The exchange, which incorporated blockchain technology into the new version, clearly saw the value of blockchain technology, but they were not surprised by it.

There are exchanges, clearinghouses and banks around the world that see blockchain as a way to simplify the issuance and trading of stocks. This week Canada’s central bank, stock exchange operator TMX Group Ltd. And the nation’s payment system uses distributed ledger technology to clear and settle securities on an integrated platform as part of its Jasper Project research initiative, which involves building and testing systems designed to integrate with existing market infrastructure. “DLT (distributed ledger technology) is a promising technology that has the potential to reduce costs for participants and open up new opportunities,” Scott Hendry, senior special director for financial technology at Bank of Canada, said in a statement on Monday. “Decisions remain to be made on how to maximize the benefits of the financial system as a whole.”

In addition to ASX’s plans to set up a blockchain for clearing, Australian fintech is also poised to take off. According to KPMG, the number of Fintech startups in Australia has grown fivefold in the past five years and the subsectors they cover have become more diverse. As the Australian fintech ecosystem becomes more diverse, investment in the Fintech sector in Australia has increased significantly.

While the Australian government’s 2018-19 budget has allocated $530,000 for blockchain research under the Digital Transformation Agency (DTA) program, this development is entirely at the specific request of the country’s Prime Minister, Malcolm Turnbull. Australia recognises that a key part of its mass adoption strategy is to ensure that the technology or services are easily accessible to the public, and has partnered with Data61, Herbert Smith Freehills and IBM to build the country’s first blockchain network. The new project, tentatively called The Australian National Blockchain (ANB), is described as a “significant new infrastructure in Australia’s digital economy,” according to the CIO.