Digital Asset, the New York-based firm behind the now-defunct blockchain-based clearing system for the Australian Securities Exchange (ASX), has accused the ASX of abandoning its blockchain plans. However, ASX representatives have rejected these claims, stating that they are misleading. The ASX had previously announced its intention to become the first stock exchange to adopt blockchain technology but made a U-turn on May 17, stating that it may consider more traditional technology instead.
According to Digital Asset co-founder Eric Saraniecki, there were two main reasons for the failure of the blockchain upgrade. First, he claimed that the ASX was unwilling to provide important test data that would have allowed Digital Asset to better test the functionality of the new system. This lack of data hindered their ability to design products that met all of the ASX's requirements. Second, Saraniecki mentioned that while the ASX was discussing a "big bang" approach to replacing its old CHESS platform, they also wanted to retain outdated elements of the old system, causing further disagreements and ultimately leading to the failure of the upgrade.
ASX non-executive director David Curran responded to these claims by stating that the problem lies in Digital Asset's lack of communication about their concerns. He emphasized the need for vendors to raise and address any concerns they may have instead of proceeding with the project if they believe it is wrong. Curran acknowledged that there were discussions regarding the concerns, but felt that they were not adequately addressed by Digital Asset.
ASX managing director and CEO Helen Lofthouse clarified that the decision to announce the moratorium on upgrades in November 2022 was based on the fact that the original solution design did not meet their current market requirements and needs. She emphasized that the challenge lies in the pre- existing requirement of the system itself and its relation to Australian settlements. Despite reports suggesting that the ASX has completely abandoned blockchain technology, ASX CIO Tim Whiteley stated that no definitive decision has been made and they are still on track to announce the solution design in the last quarter of the year, exploring all options.
The dispute between Digital Asset and the ASX centers around issues of data sharing, system requirements, and communication. While Digital Asset claims that the ASX did not provide necessary test data and had conflicting requirements, the ASX argues that Digital Asset did not properly communicate their concerns. The ASX maintains that no final decision has been made regarding the use of blockchain technology and they continue to explore various options for the solution design.
