A few weeks ago, I wrote about the Australian Security Exchange’s (ASX) plans to convert the bulk of its trading activity to a blockchain-based system. In its annual earnings report, it reassured stakeholders that it would save $23 billion a year with new distributed ledger tech (DLT).
But it seems it will take much longer than ASX initially thought, as it just announced that it will be delaying the launch.
The ASX was meant to have built and deployed one of the largest implementations of blockchain technologies to date, all by 2020. It’s been developing it since January 2016, but in light of recent events, it won’t be launched until at least March 2021. By then, five years will have passed since it was first announced.
A summary of feedback collected from users and stakeholders was included in the announcement of the delay, spotted by ITNews. In general, it seems that many remained unconvinced such a large system can be effectively built so quickly. As such, the ASX has seen fit to give itself some more time.
Many respondents raised a number of clarifying questions around the timeline for release management and the testing environments. They requested earlier access to system documentation, a detailed timetable for documentation release, a longer period between technical documentation release and commencement of testing, and more information on the types of testing in each environment.
It should be noted that ASX has long come under fire for its ambitious DLT project. Patrick McConnell, honorary fellow of the Macquarie Applied Finance Centre, penned a scathing review last December. In it, he noted that even describing ASX’s new system as a “blockchain” is a real stretch.
“The proposed solution is probably as far from ‘pure’ blockchain that one can get, while still claiming to be blockchain. [It] has so relaxed the constraints of pure blockchain, that it clearly demonstrates the limits of this technology rather its success,” McConnell wrote. “This ‘Blockchain-Lite’ not only fails to achieve most of the claimed benefits of DLT, it actually adds costs and risks for market participants.”
McConnell claims the ASX is “firmly the single central authority” of its new permissioned DLT, on a network it controls. Such a system does not encourage the transparency or decentralization often touted by blockchain evangelists.
By the looks of things, the ASX doesn’t really care about the tech, despite knowing all the buzzwords.
Let’s hope the extra time is enough for the ASX to build something that works. But even if it does, a functional system probably wont be enough to appease its shareholders – they want the $23 billion in savings, not the hype.