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Digital Asset — the New York-based firm in charge of the Australian Stock Exchange’s now-defunct blockchain-based clearing system — has accused the securities exchange of abandoning its blockchain plans.
Meanwhile, ASX representatives applauded Cointelegraph’s statements, calling the statements misleading.
Over the past seven years, ASX was to become the world’s first securities exchange to adopt blockchain technology in partnership with a New York-based firm. However, on May 17, ASX announced that it would be ditching the upgrade and likely turning to more traditional technologies.
According to a recent report from The Australian, Eric Saranieki, co-founder of Digital Asset, told the members of the joint parliamentary committee on corporations and finance on June 8 that there are two main reasons why the blockchain upgrade failed.
First, Saranetsky argued that ASX was unwilling to transmit important test data that would allow Digital Asset to better test the functionality of the new system.
“It affected our ability to develop something that would fully meet their requirements.”
He said he didn’t know why ASX was so reluctant to hand over this key data, but it ended up causing Digital Asset to make “speculation in a vacuum.”
Second, Saranetsky said that despite ASX publicly talking about a “big bang” method to replace its nearly 30-year-old CHESS platform, it simultaneously urged Digital Asset to keep legacy elements of the old system. This reportedly led to further disagreements between the two companies and ultimately to the failure of the update.
Concern not properly raised, protects ASX
However, in comments relayed to Cointelegraph, ASX non-executive director David Curran said the issue was a lack of communication from Digital Asset regarding their concerns.
Curran said he made it clear to “high-ranking members of Digital Asset” and others that if there are concerns about the project, there are ways in which they should be raised and addressed.
“I made it very clear to Digital Asset… I had little patience with software and hardware vendors who said they didn’t like doing something but did it anyway because the client told them to.”
“If they sincerely believed it was wrong, they had mechanisms in place to stop it and actually raise [эти опасения]. During these conversations, I agreed that this was not done, ”Curran added.
Curran clarified that he could not say “too much” about the specifics of this issue due to the nature of the ongoing review.
ASX Managing Director and CEO Helen Lofthouse said it was not so much the “soft requirements” that caused the project’s difficulties, but the pre-existing requirements of the system itself and how they relate to how settlements operate in Australia.
Lofthouse explained that the decision on November 17, 2022 to announce the upgrade was suspended stemmed from the conclusion that the initial design of the solution “would not be able to do what we need to do, which is both meet current market requirements and give flexibility.”
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While it has been widely reported that ASX has completely ruled out blockchain technology, ASX CIO Tim Whiteley told Australian tech publication ITNews that “no firm decision” has been made.
“We remain committed to announcing the solution design in the last quarter of this calendar year and continue to explore all options for the solution design,” Whiteley added.