ASX Increases Stake in Digital Asset Holdings to About 8.5%
June 22 2016 - 2:48AM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--ASX Ltd. (ASX.AU), the operator of
Australia's dominant securities exchange, has lifted its stake in
the U.S. company it has turned to for the development of blockchain
technology for equities market settlement.
ASX said Wednesday it would invest US$7.2 million in Digital
Asset Holdings LLC, increasing its holding in the company to about
8.5%. It has also entered a commercial agreement appointing Digital
Asset as its preferred partner to develop distributed ledger
technology, also known as blockchain, for post-trade in the
Australian cash equities market.
In January, the stock exchange paid 14.9 million Australian
dollars (US$11.1 million) for a 5% stake in Digital Asset, funding
its initial phase of development. That deal included a warrant to
lift its investment, which would also give it the right to appoint
a director to Asset Holdings' board.
Early last year, ASX laid out plans to replace or upgrade its
main trading and post-trading platforms, including clearing and
settlement of the equities market.
The system it currently uses for clearing and settlement in
equities is known as Chess. ASX previously said it would work with
the U.S.-based company to design a new technology while it
continues to use Chess, and expected to make a final decision in
2017.
Blockchain, a secure database of transactions that take place
within a network, is the key technology that underpins digital
currency Bitcoin. Standards for regulated financial markets mean
the design would differ from publicly available blockchain and
would be based on a private network where the involved parties
participate only by permission.
ASX executives including former chief executive Elmer Funke
Kupper are proponents of blockchain, which they say may be able to
simplify and speed-up post-trade processing significantly. The
technology might also reduce back-office administration and
compliance costs.
In a speech in Melbourne early this month, ASX Deputy CEO Peter
Hiom said blockchain had great potential but there remained
important questions regarding scalability, security and performance
that had yet to be answered.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
June 22, 2016 03:33 ET (07:33 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
ASX (ASX:ASXCD)
Historical Stock Chart
From Nov 2024 to Dec 2024
ASX (ASX:ASXCD)
Historical Stock Chart
From Dec 2023 to Dec 2024
