ASX beaten to the blockchain punch by UK group Calastone

The ASX’s distributed ledger for clearing the equities market will no longer be the first time local fund managers rely on a blockchain to process their trades, after British-based Calastone revealed it will switch on its own distributed ledger technology (DLT) in May.

Calastone, whose systems automate 80 per cent of Australian institutional fund flows, will beat the ASX by two years to powering on a system promising unquantified cost savings for global investors.

ASX is due to belatedly switch on its blockchain, which will replace CHESS, in March or April 2021.

Calastone’s software, which manages back-office processes, is used by 95 per cent of Australia’s managed fund platforms and about two-thirds of fund managers. Globally, about 1700 institutions in 40 countries are on the network that makes more than 9 million messages, with £170 billion ($317 billion) of value attached, each month.

Calastone’s blockchain-inspired system, known as the “distributed market infrastructure” (DMI), digitises order routing, settlement and registry services. The London-based company predicts its infrastructure will save the global funds industry £3.4 billion annually.

“When we go live collectively and overnight [in May], we will literally become the world’s largest financial community operating on DLT,” Edward Glyn, Calastone’s head of global client relationship management, told more than 100 custodian and money managers executives at a breakfast briefing in Sydney last week.

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Source: ASX beaten to the blockchain punch by UK group Calastone