In brief
- The National Stock Exchange of Australia is building a system that offers digital asset trading and real-time settlements.
- It'll go head-to-head with ASX, the country's leading securities exchange.
- The company that's building the system, iSignThis, is fighting a lawsuit against ASX.
The National Stock Exchange of Australia has partnered with a fintech company, iSignthis, to build a blockchain-based settlement and clearing system.
The system, called ClearPay, will offer digital asset trading and settlements in real-time. It could be used to make fractional trading—the option to say, buy a fraction of an Apple stock—possible. It’s expected to go live by early 2021, whereafter NSX expects brokers to participate due to the implementation of an industry-standard blockchain.
iSignThis will also own 59% of ClearPay Ltd., and has bought a 19% stake in the National Stock Exchange.
"Market commentators are in broad agreement that cash equity exchanges are facing a global technology revolution,” Thomas Price, acting CEO of NSX, said, in a press release, adding, “we consider that this is the right time for the NSX to act."
Checkmate for CHESS
The system, built together with blockchain company Digital Asset, will replace its outdated CHESS clearing system. Normally, it takes three days to clear trades, but the new system will make trades happen in a single day.
It will go up against the ASX, the country’s leading securities exchange, which will start testing its own blockchain-based trading system in July.
The ASX is no friend of iSignThis, which in December filed a lawsuit against following the suspension of its shares in September. This happened after research group Ownership Matters expressed concern about how the company was run and the information it disclosed, according to Finextra. The quality of the firm’s customer base has also been called into question: a quarter of its companies are facing regulatory action, and some allegedly ran illegal trading scams.