The Australian Securities Exchange will protect itself against disrupters by redesigning its technology systems to use a "blockchain" that will allow near real-time settlement of equities trades and slash administration costs.

ASX is working with Digital Asset Holdings to build a "distributed ledger" that could ultimately replace the clearing and settlement systems provided by the ASX through its CHESS platform. ASX has paid $14.9 million for a 5 per cent equity stake in the New York-based company.

ASX chief executive Elmer Funke Kupper says blockchain will reduce post-trading costs. Credit:Daniel Munoz

"The work we have done with ASX to date indicates that Australia has a unique opportunity to be a world leader in the adoption of distributed ledger technology," said Digital Asset Holdings chief executive Blythe Masters, who played a key role creating the modern credit default swap when she worked at JP Morgan.

Distributed ledgers, also known as blockchains, can be thought of as a secure network of computers which continuously maintain the records without intervention from an outside third party. The ledgers contain complete histories of the transactions and are updated in close to real time.