A look at the Australian Securities Exchange's blockchain project, abandoned in November 2022, to replace its combined trading, clearing, and settlement system
Byron Kaye / Reuters : Tweets: @katebevan , @johnreedstark , @byronkaye , and @smdiehl Tweets: Kate Bevan / @katebevan : Modernisation is hard, yo, and maybe don't plump for a controversial technology that has yet to prove it's suitable for large-scale, mainstream use in a system that many third parties have to interact with https://www.reuters.com/... John Reed Stark / @johnreedstark : ASX debacle not surprising. Been 15 yrs since blockchain hype began and still no use has come of it. Besides crypto & NFTs, which are essentially just Ponzi schemes and worthless jpeg fractionalized links, the sole use case is for criminals (eg ransomware).https://www.reuters.com/ ... Byron Kaye / @byronkaye : People put off retirement for the Australian Stock Exchange's seven-year blockchain overhaul. Then it was cancelled. My story on the rise and fall of the world's most ambitious “distributed ledger” project: https://www.reuters.com/... Stephen Diehl / @smdiehl : Can we please stop with this vapid hedging about “blockchain technology” or mindlessly repeating “optimistic about the underlying technology.” In reality, every time a blockchain has been applied to anything real, it's failed. The underlying tech sucks. https://www.reuters.com/...
Context & Ripple Effects
The ASX spent seven years trying to replace its combined trading, clearing, and settlement system with blockchain, announcing the project in 2017 and deepening the bet by working with startup Digital Asset and investing in its $35M Series C (Digital Asset partnership). In November 2022 it pulled the plug entirely, taking a $165M-$172M write-off (the abandonment and write-off).
This Reuters piece is the post-mortem, landing weeks after the collapse and amid pointed commentary — Kate Bevan's warning against betting critical third-party infrastructure on unproven technology, John Reed Stark's charge that fifteen years of blockchain hype has produced little enterprise use. The skepticism has receipts: a review of 33 high-profile financial-sector blockchain projects had already documented weak adoption across the industry.
First-order effects
- ASX must keep running its legacy combined trading, clearing, and settlement system indefinitely while funding a conventional replacement, having already absorbed the nine-figure write-off.
- Digital Asset loses its flagship exchange deployment, the reference customer underpinning its pitch to other market operators.
Second-order effects
- Other exchanges and financial firms weighing distributed-ledger upgrades now have a seven-year, nine-figure failure to point at, hardening the resistance documented in the industry-wide project review.
- Australia's regulator shifts from observer to enforcer of modernization failures, later suing ASX over the botched upgrade (regulator lawsuit) — raising the legal cost of overpromising infrastructure timelines.
Third-order effects
- Market infrastructure vendors pivot their sales case from technology novelty to delivery track record, and exchanges treat core settlement as too systemically entangled with third parties to experiment on — the trust-and-institutions argument critics made all along.
- If regulators increasingly litigate failed upgrades rather than merely flag them, boards will demand conventional fallbacks before approving any novel-technology rewrite of critical market plumbing.
The trend: Financial market infrastructure is retreating from blockchain back to conventional architectures, with regulators converting failed modernization projects into enforcement actions.