“We are moving two to three trillion dollars of securities on to this system and that is larger than the whole global crypto world is sitting on the blockchain,” Mr Stevens said.
ASX is also considering governance principles aligned to public blockchains.
Mr Stevens said “everyone can come in and collaborate” at the ASX “Australian liquidity centre”, a data centre, and the plan was to “make that a more collaborative ecosystem of data, rather than just ASX’s data – and I think CHESS is a large example of that”.
Describing the benefits of the blockchain ASX is building alongside New York-based Digital Asset – which plans to roll the system out to other global exchanges after the ASX launch in April 2023 – Mr Stevens said for the Australian equity market, “when you go to a distributed ledger, what you are going from is a unilateral with me to a multi-lateral relationship with the market”.
Under old CHESS, data moved on a bilateral relationships basis: market participants dealt with ASX. But he said with the new CHESS, “you will know everyone else is synced at that same level”.
“What that means is, we are all in sync on an immutable ledger. It’s all in real time. And the beauty of it is smart contracts are being built on top of that, so you have the same data structures … It allows not just ASX, but the market, to go forward and build things on top of this.”
With decentralised finance (DeFi) able to draw on a larger pool of developers on Ethereum and the ASX system requiring knowledge of the “Digital Asset Modelling Language” (DAML), Mr Stevens said “it will take time for the market to actually build to that” vision.
The third day of the Macquarie summit, which was focused on fintech, opened with prominent investor Mike Novogratz from Galaxy Digital. He said he had invested in bitcoin, which was created as “a middle finger to the system”, and started to enjoy the community, which led him into Ethereum’s Ether (“the best investment I ever made”).
DeFi projects are setting out to challenge the ASX and other centralised markets, with open versions of the technology, that are global. UniSwap is an example of a decentralised computer protocol that allows anyone to trade in any digital assets.
“This is about more than bitcoin; this is really a revolution,” Mr Novogratz told the Macquarie clients. “This stuff is macro – it’s as macro as you get. It’s predicting trends, predicting the future and having a sense of momentum and liquidity.”