Hong Kong Stock Exchange Consults Australia’s ASX On Blockchain Settlement
The Hong Kong Stock Exchange (HKEX) is planning to venture into blockchain equity settlement and it is reportedly consulting with the Australian Securities Exchange (ASX) which already has its own blockchain settlement system.
The recent reports claim that HKEX is looking to gain from the knowledge that ASX has gained from its venture into blockchain settlement. The Australian exchange was the first global exchange to adopt blockchain technology into its post-settlement process. It implemented its blockchain solution after two years of comprehensive tests which allowed the organization to gain a lot of knowledge on blockchain implementation to enhance its services.
ASX’s involvement with blockchain seems to have been a great step forward because the Australian exchange also managed to emerge as the most profitable stock exchange in 2017. It reported a profit margin of 77 percent which was slightly higher than the 71 percent profit margin reported by the Hong Kong Stock Exchange. The latter is now planning to travel down the same blockchain-related path and it wants to do it the right way by consulting ASX.
HKEX wants to adopt blockchain technology for its platform so that it can optimize its services. Charles Li, the chief executive of the Hong Kong-based exchange revealed on Tuesday that the organization plans to implement blockchain for settling stock lending and borrowing and also to manage over-the-counter trades. It also plans to achieve all this at lower costs than before. the CEO also added that HKEX has been in talks with ASX in order to gain the necessary knowledge.
Li also stated that technology vendors have not provided the company with adequate support after its previously announced plan to create a blockchain-based private market targeting smaller enterprises. The new efforts with the help of ASX are particularly aimed at cutting costs.
The decision by the Hong Kong Stock Exchange to pursue the use of blockchain to enhance its platform highlights the growing acceptance and adoption of blockchain technology to improve already existing systems. This is particularly because digital ledger technology which is the underlying technology used to operate cryptocurrency offers unrivaled security and efficiency, making it ideal for systems used in organizations.
The new endeavor also highlights Li’s efforts aimed at making the stock exchange platform more appealing and more effective. The latest listing commitment report from the exchange revealed that the company is working towards maintaining the good quality and reputation of the exchange.