Sydney Stock Exchange (“SSX”) and Bit Trade Labs have announced the establishment of a joint venture to develop a blockchain based equities market settlement and registration system, initially for SSX’s equities and private markets platforms, but also available for other market and market operators.
The JV is targeting implementing a blockchain solution, subject to regulatory and market participant’s approval and engagement, within months for its private markets network and early in 2018 for the SSX equities market.
The announcement was made at a “Practical Blockchains” forum run by SSX, Bit Trade Labs and ADCCA (the Australian Digital Currency Commerce Association) which was opened by an address from the Hon. Wyatt Roy, MP, Assistant Minister for Innovation this week.
In his opening address, the Hon. Wyatt Roy said, “This is a great initiative. Blockchain has the potential to be a key driver of innovation in this country”.
SSX Chief Operating Officer David Lawrence said “We are delighted to be working with an Australian-based innovation company to develop blockchain based solutions for equities markets.
“As we will be settling our own market, we are not constrained by the recent clearing competition issues facing others seeking to enter the Australian market. This allows us to start with a blank page and bring the creative, markets-based thinking of the Bit Trade Labs team, along with input from industry, to develop new solutions to suit the local market.
“We will be developing our blockchain solution initially for the SSX but we fully intend to make it available to other markets, and have an open access philosophy. Our key drivers are to improve efficiency and save our market participants and brokers money,” David Lawrence said.
He added that moving to a real time settlement and registration environment (T+0) was a realistic aspiration for SSX’s blockchain based solution. “T+0 would deliver many benefits – remove collateral risk, increase trade velocity and hand back some controls to brokers and market participants rather than them and us paying fees to other exchanges,” David Lawrence said.
“Our partnership with, and support of, a company such as Bit Trade Labs and the blockchain development both align well with our ongoing domestic focus upon listing Australia’s startups and innovation companies. We believe there is a very real place for startups and innovators in Australian public capital markets and SSX is ideally positioned to fill the growing capital void” Mr Lawrence said.
Ron Tucker, BitTrade CEO, said, “We are very excited to be at the forefront of distributed ledger innovation for the financial service markets. With BitTrade’s world leading Blockchain development resources, and the stock exchange’s trading and settlements expertise, we're together ensuring Australia continues to drive a leadership role in the global adoption of this innovative new financial technology right now.”