ASX might have another blockchain battle on its hands, beyond its on-going fight to use the distributed ledger technology to build a replacement for the CHESS system that underpins Australia's cash equity market.
In recent weeks, bankers and brokers have been holding meetings with Francois Barthelemy, one of the founders of the UK-based blockchain developer SETL.
Now Street Talk can reveal high-level meetings with SETL chief executive Peter Randall and Scott Hudson, head of intermediary services at share registry giant Computershare started on Monday and will run into Tuesday.
At the time, Computershare said it was bringing together asset owners, brokers, regulators and "market infrastructure providers to propose an open platform that meets the needs of all industry participants".
The meetings held in recent weeks suggest that process is underway. But the impression that some in the market have been left with from these discussions is that Computershare and SETL's blockchain system is emerging as a potential competitor to the ASX system. The threat comes as Computershare CEO Stuart Irving prepares to address the APAC blockchain conference this week, which is bringing a who's who in the world of distributed ledgers to Sydney.
Clearing and settlements is seen as fertile ground for a blockchain. (If, like us, you're still struggling with what the blockchain is, think of it as a shared database securely held on a linked network of computers, which continuously maintains the records on rules set out in code, thereby removing the need for a "trusted third party" to monitor transactions).
ASX is working with a New York company called Digital Asset Holdings to develop its CHESS replacement based on the blockchain, and over the last six months has been consulting with the industry about how its new system should work.
But there is some dissatisfaction with how these discussions have proceeded and on Monday ASX released a report outlining the broking community's concerns.
Given brokers want the automation of so many different processes, a question is now whether the DAH blockchain will be able to deliver the goods.
ASX will make a decision on the DAH technology by the end of the calendar year.
But it appears that Computershare and SETL may attempt to seize on the dissatisfaction in the market with the ASX approach.
But those unhappy brokers might have just got the bargaining chip they need to get a better deal from the market operator.
