"Blockchain" experiment: Australian financial market is one step ahead

Bitcoin has failed to change the world as originally envisioned, but the " blockchain " technology behind it is about to accomplish this goal: Australia is expected to become the first country in the world to apply the booming blockchain technology on a large scale to the financial market.

The Australian Stock Exchange (ASX) has chosen to use the blockchain technology behind Bitcoin as a replacement for its clearing and settlement system. Since the end of last year, ASX has been working with a US company called Digital Asset to build a new trading system for itself. The latter announced last month that it had raised $ 60 million in funding from institutions including the German Stock Exchange and the US CME , and the designer of the "CDS" that helped boost the last financial crisis , the " Queen of Wall Street " - Blythe Masters, also joined the company.

By using blockchain technology in the clearing and settlement system, ASX CEO Elmer Funke Kupper said the stock exchange is in the process of replacing its trading system because blockchain can reduce the cost and complexity of clearing and settling transactions and save time. Currently, all of this work is done by ASX 's CHESS system, which is in urgent need of an upgrade.

" We think we should be leading the world in this, and I believe we are, " Kupper said last week. " We are taking this technology more seriously because given our market structure and size, the potential savings of $ 4.5 billion a year is significant. Of course, we could fail, and we'd still gain something. "

The blockchain used by Bitcoin is a decentralized ledger system that records every transaction of this cryptocurrency. All transactions are shared and verified by a peer-to-peer network of computers. This " distributed ledger " model monitors the transfer of funds for Bitcoin, and by the same token, it can also monitor the transactions of any valuable assets, such as stocks, bonds, and futures.

Similarly, the application of blockchain technology in exchanges can allow assets to flow between trading parties based on a shared electronic database. The transaction process is then not completed by the exchange, but by mutual verification by all participants.

Although Bitcoin has been aiming to become a currency that changes the world since its inception, it has never been able to achieve its goal. Instead, it has been ruined by criminals using it to conduct illegal transactions on websites such as Silk Road. Even so, a large number of financial institutions have seen the huge potential of the blockchain technology used by Bitcoin. The U.S. Securities and Exchange Commission has approved the use of such blockchain technology for publicly traded shares.

However, regarding the application of blockchain in the financial market, many experts have expressed that we should not be too optimistic. The main reasons include regulatory and monitoring barriers, and the fact that it may take several years or even more than a decade from the emergence of new technologies to their stable promotion and application.