The Australian financial system is slowly starting to transform and Blythe Masters is leading the charge. When speaking with Cameron Clyne at the ASIC Annual Forum held in Sydney on Tuesday, Masters said that the Australian ASX blockchain project can show the world how useful this technology really is in modernizing post-trading processes in financial markets:
“I believe the project the ASX is running has the potential to be one of the first successful [blockchain] projects in the world,”
In January of 2016, the Australian ASX invested more than $10 million for a 5% stake in Digital Asset Holdings – a blockchain solutions firm headed by Blythe Masters – and tasked the company with implementing a blockchain-based securities settlement system for the ASX.
While speaking at the ASIC forum, Masters pointed out that billions of dollars and many unnecessary delays can be shaved from the outdated securities trading systems that are currently implemented in equity markets across the globe, “you will have the opportunity to eliminate layers and layers of inefficient post-trade processing that costs a fortune, consumes a lot of jobs and leads to delay and increases risk” said Masters.
Elmer Funke Kupper, who resigned from his post as CEO of ASX on Monday due to an ongoing investigation by the Australian Federal Police, also agrees with Masters on the potential for blockchain technology to eliminate billions in fees related to the trading and clearing of financial securities.
In a recent speech given at the Australian Financial Review Business Summit, Kupper said:
“At the ASX we realise we will lose a little bit to begin with, as blockchain could take $5 billion out of the cost of buying shares, but we’re looking to the future. We’re unleashing innovation, competition and better services across the value chain.”
While the application of blockchains in the Australian financial system can bring great benefits, the technology does have some hidden costs. According to a recent article by The Sydney Morning Herald, the ASX stands to lose millions in trading fees under a more efficient blockchain securities clearing system:
“ASX has said it could lose about $90 million in annual revenue earned from clearing and settlement services under the status quo if the technology is adopted”
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