The ASX has decided to dump a blockchain project that they have invested $250 million in, after it all got a bit too hard.
ASX has waved ciao to the blockchain project that was supposed to replace its ageing CHESS settlement and clearing system. For those who don’t know, CHESS stands for Clearing House Electronic Sub-register System. The system exchanges cash for securities irrevocably.
According to the Australian Financial Review, a report from Accenture identified a range of problems with the new blockchain project “including uncertain timelines, communication issues with technology vendor Digital Asset and excessive complexity.”
As a result, they have decided to write the project off and go back to a more traditional clearing and settlement system (modernising it but also maintaining the legacy infrastructure).
“ASX will write off $245 million to $255 million pre-tax in costs associated with the project, which has dragged on for seven years,” The Australian Financial Review reports.
“In a harsh blow to the credibility of the exchange and to distributed ledger technology more broadly, the independent report by Accenture highlighted significant gaps and deficiencies with the design of the system and ASX’s ability to deliver it.”
The Sydney Morning Herald further reports that “the ASX had been investing in the technology project since 2017 and the go-live date had been pushed back due to a range of factors including COVID-19, complaints from the industry about lack of consultation and technological setbacks.”
Though the massive $250 million figure will undoubtedly be pointed to as a huge waste of time and resources, The ASX said “the writeoff does not prevent the ASX from using some of the technology developed,” the Sydney Morning Herald reports.
ASX chairman Damian Roche said: “On behalf of ASX, I apologise for the disruption experienced in relation to the CHESS replacement project over a number of years.”
Given the project was going to be, as Gizmodo puts it, “used globally as an example of the world’s first, actual industrial-scale blockchain use case,” this is yet another crushing blow to the crypto faithfuls of the world.
But given the wild ups and downs we’ve already seen in the world of crypto, perhaps we should just see this as par for the course?