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ASX operator plans bitcoin-inspired tech

 

The company that operates the Australian stock market plans to update its shareholder recording systems using similar technology to that which underpins bitcoin and other cryptocurrencies.

ASX Limited on Thursday said it has already tested out the distributed ledger technology, which decentralises records and shares them across a private network.

It believes the tech is secure and can help reduce customers' costs.

The ASX did not give a deadline for replacing the clearing house electronic subregister system (CHESS) it has been using since the 1990s to manage transaction clearing and settlement, but aims to have a timetable in place by March.

Chief executive Dominic Stevens said the ASX had been looking at distributed ledger technology (DLT) - the best known form of which is the public blockchain upon which bitcoin operates - for almost two-and-a-half years.

"We believe that using DLT to replace CHESS will enable our customers to develop new services and reduce their costs, and it will put Australia at the forefront of innovation in financial markets," Mr Stevens said.

"While we have a lot more work still to do, today's announcement is a major milestone on that journey."

The tech was designed by US blockchain developer Digital Asset and will be operated by the ASX on a secure private network, with participants granted permission to access it.

The distributed ledger allows transaction details to be recorded in multiple places at one time, helping make it harder for records to be hacked or corrupted.

The chief executive of DigitalX, an ASX-listed advisory firm that this year helped launch the first Australian cryptocurrency, said the upgrade would increase transparency and security.

"You no longer have to trust one organisation to do things right, and be an essential honey-pot for hacking," Leigh Travers told AAP.

"It means you can trust in technology rather than trusting in organisations."