The Australian Securities Exchange (ASX), the eighth-largest sharemarket in the world, will replace its current system CHESS with the distributed ledger technology to manage the clearing and settlement for buying and selling stocks.
Blythe Masters, CEO of Digital Asset, said: "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".
ASX bought a minority stake in USA blockchain developer Digital Asset through a A$14.9 million ($11.27 million) investment in January previous year, to design a new post-trade solution for the Australian equity market.
ASX also invested an undisclosed amount in Digital Asset, bringing the total raised by the startup from investors that include JP Morgan to more than US$115m (£86m), said Digital Asset in a statement.
In February, the ASX revealed it was on track to make a decision on whether DLT would be a suitable replacement for CHESS, which provides clearing, settlement and asset registration services.
"ASX has consulted extensively on the needs and priorities for replacing CHESS, including with customers, share registries, software vendors, other exchanges and industry associations".
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The Australian Securities Exchange (ASX) has confirmed that blockchain technology will replace its existing clearing and settlement system, becoming the world's first major stock exchange to do so.
ASX will now work with stakeholders on finalising the scope of Day 1 functionality for the new system, drawing on its extensive consultation that will continue in 2018.
The ASX said it would release details on how the system would work and when it might be launched in March next year.
DLT software will settle and clear equity trades across a network where participants are known or "permissioned" to have access and must comply with the exchange's ongoing and enforceable obligations.
"Together, Digital Asset and our client ASX have shown that the technology not only works, but can meet the requirements of mission critical financial infrastructure".
The ASX also announced that it will exercise its right to participate in DA's recent Series B fundraising, subscribing for US$3.5 million in convertible notes.