The ASX is spending nearly A$10 million (US$7,157,065) increasing its stake in the US-based company behind the blockchain technology its using to upgrade post-trade services.
The exchange spent A$14.9 million in January for a 5% equity interest in New York-based Digital Asset, a start-up led by former JP Morgan executive Blythe Masters, working with distributed ledger technology, aka blockchain, the tech behind Bitcoin and a new frontier for the financial industry.
The ASX is moving towards the real-time settlement of trades, currently run by the CHESS system.
As part of that deal to fund an initial phase of development, the ASX had the right to increase its stake and appoint a director to the board, announcing this afternoon that the extra A$10 million will take its stake to 8.5%.
Digital Asset already has an impressive lineup of investors on its books, with a dozen global financial institutions buying in, including Accenture, ABN AMRO, BNP Paribas, Goldman Sachs, Citi, IBM and JP Morgan.
Blockchain allows transactions to be settled without third parties such as banks, via a secure computer network, so financial institutions are keen to be at the forefront of the evolving technology.
The roll out of phase two of the ASX’s platform upgrades, with phase one involving the main trading and risk management systems due to be completed by the end of 2016.
The post-trade architecture will be based on a private network whereby all parties that participate will be allowed to do so – as they do when connected to CHESS.
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