The Australian Securities Exchange (ASX) has announced that it will replace its CHESS post-trade settlement system using technology developed by blockchain startup Digital Asset.

After two years of building proofs of concept, working with potential users and testing the implementation, the much-anticipated decision represents a key milestone, as ASX is set to become the first mainstream exchange in the world to migrate one of its core services to a blockchain-based system.

Dominic Stevens, managing director and CEO of ASX, said in a statement:

“We believe that using DLT to replace CHESS will enable our customers to develop new services and reduce their costs, and it will put Australia at the forefront of innovation in financial markets. While we have a lot more work still to do, today’s announcement is a major milestone on that journey.”

The platform developed by Digital Asset uses the technology in order to allow the mutualization of financial market data and processes across multiple market participants. It does this while maintaining confidentiality and scalability – both critical for market infrastructures.

ASX also announced that the firm has taken up its pro-rata right to participate in Digital Asset’s recently announced Series B financing. With this, the total amount raised by Digital Asset to date is over $115 million.

ASX image via Shutterstock