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ASX Becomes First Global Market to Adopt Blockchain Technology: What, Why, and How

After nearly two years of development, the Australian Stock Exchange (ASX) is beginning to implement blockchain technology. This innovation will replace the former CHESS system, which is over 25 years old.

 

This move has raised many questions: what is blockchain, why is it better, and what does it mean for me? Let’s tackle these.

 
 

What is Blockchain?

 
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Though Australia’s SX representatives didn’t outright name blockchain technology in their press release, they did mention that they would be adopting distributed ledger (DL) technology. This is a method of recordkeeping that has been termed “blockchain,” while the term itself has been strategically left out of news releases.

 

The omission is most likely due to the term’s connection to cryptocurrencies such as Bitcoin, which is often viewed in a negative light in global markets.

 

Distributed ledger technology (blockchain) is a method of recordkeeping that decentralizes data. It creates a record that is dispersed among thousands of computers across the globe that individually verify the accuracy of a transaction

 

So, what exactly is DL? Distributed ledger technology (blockchain) is a method of recordkeeping that decentralizes data. It creates a record that is dispersed among thousands of computers across the globe that individually verify the accuracy of a transaction. Each transaction and record is connected, so any individual change or attempt to change information will change the entire ledger and notify all parties involved.

 
 

Why is ASX Using it?

 
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In the case of ASX, blockchain will allow the stock exchange to track who owns shares in listed companies, and keep a record of transactions and settlements when people buy and sell shares.

 

The old Clearing House Electronic Subregister System (CHESS), used to do this..

 

However, it being so outdated, the stock exchange has been looking to upgrade its technology. The development is newsworthy because this makes ASX the first global market to use blockchain technology to clear and settle trades. But, CHESS was working before, so why the change?

Blockchain offers many advantages to traders which will have major projected benefits on the Australian economy.

 

Faster, cheaper, and more secure transactions saves money for domestic and international traders, making the ASX more globally competitive and increasing trade traffic, which boosts the Australian economy.

 

The technology will secure transactions and records in a way that CHESS couldn’t, and virtually block the exchange from attack. As a result, verifying transactions takes less time, is less expensive, and more secure by removing the middlemen that would normally perform verifications.

 

These benefits are projected to result in a trickle-down effect. Faster, cheaper, and more secure transactions saves money for domestic and international traders, making the ASX more globally competitive and increasing trade traffic, which boosts the Australian economy. Plus, all of the news and fanfare is great publicity for an already popular global trading market.

 
 

What Does It Mean for Me?

 

Even if you aren’t involved in stocks or the ASX directly, the echoes from this move will hit all associated with the Australian economy.

 

As more money flows into the continental country, production inevitably increases, boosting the number of suppliers in the area, and opening the market to international businesses. As well, with this money comes expendable wealth, making Australia a lucrative market for international suppliers looking for a distributor or buyer in the area.

 

Most of all though, Australia moving into the future of global finance begins a shift in ideas about technologies like blockchain and traditional banking. As FinTech (financial technology) evolves, banks become increasingly dated and unable to catch up with demand for low-cost, fast, and secure ways to move and track money.

 

This innovation affects anyone with a bank account and money to move. So, almost everyone.

 

Australia moving into the future of global finance begins a shift in ideas about technologies like blockchain and traditional banking. As FinTech (financial technology) evolves, banks become increasingly dated and unable to catch up with demand for low-cost, fast, and secure ways to move and track money

 

The ASX may be the first global exchange to adopt the technology, but it follows the lead of groundbreaking companies that have invested in and continually developed blockchain technology. One of the leaders in that space is Veem.

 

Veem is a global payments solution that allows businesses to make fast, secure, and cost-effective transfers internationally. Our innovative multi-rail technology finds the best route for your money to travel, and sends it off. Blockchain is one of these routes.

 

Veem is prepared to implement blockchain in its payments system wherever the technology is required, and is the first solution in the global payments scene to use it. Developments such as the one made by the ASX further solidify the effectiveness and security of blockchain technology, and allow Veem to offer the payments method for more transactions.

 

Start the application process today, and bring your business payments into the future of finance.

 

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