Australia’s main stock exchange has said it will become the first global market to use the technology behind bitcoin to clear and settle trades.
The Australian Securities Exchange (ASX) will replace its current clearing system with blockchain technology.
The new system has been in development and testing for more than two years and aims to cut the cost of transactions, and make them faster and more secure.
A timeline for the transition to the technology will be given by March.
ASX chief executive Dominic Stevens said the move to distributed ledger technology – also known as blockchain – will “put Australia at the forefront of innovation in financial markets”.
Blockchain is a method of recording data via a digital ledger of transactions, agreements, contracts or anything that needs to be independently recorded and verified as having happened.
The big difference is that this ledger isn’t stored in one place, it’s distributed across several, hundreds or even thousands of computers around the world.
The ASX has been working with the US-based blockchain start-up Digital Asset Holdings to develop the new system since January 2016.
“After so much hype surrounding distributed ledger technology, today’s announcement delivers the first meaningful proof that the technology can live up to its potential,” chief executive of Digital Asset Holdings Blythe Masters said.