The Australian Securities Exchange (ASX) has signed a deal with cloud computing giant VMware to ramp up the development of its blockchain-based equities clearing and settlement system.

Announcing the news on Monday, ASX said that the new deal with VMware and its existing blockchain partner Digital Asset (DA), will help support its distributed ledger technology (DLT) initiatives in Australia and New Zealand.

The ASX has been working on to replace its existing decades-old CHESS clearing house system since as early as 2017, in an association with DA. The system was initially expected to go live by the end of 2020, but got postponed until the second quarter of 2021.

Yuval Rooz, CEO of Digital Asset, recently told The Block that the ASX project is “fairly complex,” given that they are working to replace “the entire behavior of the Australian clearing house” and “the entire lifecycle events of Australian cash equities.”

The new partnership “confirms our belief in the potential of DLT as we remain on track to deliver the CHESS replacement system in March-April 2021,” said Peter Hiom, deputy CEO of the ASX, in Monday's statement.

VMware's SVP and chief research officer, David Tennenhouse said, "We’re working closely with DA and ASX on a combined offering, and "providing a state-of-the-art DLT-based system," which will create new business opportunities.