Blockchain Remains Focus at ASX After CEO Departs, Chairman Saysby
Former ASX CEO stepped down this week amid Cambodia probe
Funke Kupper was vital to striking deal on use of blockchain
Rick Holliday-Smith, chairman of ASX Ltd., said his company is committed to exploring blockchain technology after the firm’s chief executive officer, who led a deal to radically overhaul how its market clears and settles trades, resigned suddenly this week.
Elmer Funke Kupper stepped down from the operator of Australia’s biggest stock exchange on Monday after 4 1/2 years in charge, as police investigate activities in Cambodia of the Australian betting company he formerly led. Under Funke Kupper, ASX forged a deal with Digital Asset Holdings LLC, the U.S.-based blockchain startup led by former JPMorgan Chase & Co. banker Blythe Masters. The pact will explore moving ASX’s post-trade processes to a version of the software that fuels the bitcoin digital currency.
“The ASX Board is committed to the development of distributed ledger technology,” Holliday-Smith, who is running ASX until a new CEO is hired, said in an e-mailed statement. “It offers a unique opportunity for Australia to be a leader in the assessment of innovative market solutions.”
ASX agreed in January to invest A$14.9 million ($10.5 million) into Digital Asset, joining investors including JPMorgan, CME Group Inc. and ICAP Plc. The firms are hoping to radically speed up the time it takes to clear and settle financial trades. The deal is the boldest attempt yet to prove the worth of a so-called distributed ledger system.
“We can now trade equities in 150 microseconds, then it takes two days to
settle. That makes no sense,” Funke Kupper said in an interview at the time.
Digital Asset is among about a dozen startups that are racing to prove that blockchain, the technology underlying bitcoin, can be applied to financial markets. While in today’s securities markets a central authority oversees the transfer of cash for shares, Digital Asset aims to link all participants in that process on the same database to allow real-time movement of assets. While the aim in Australia is to reduce settlement times to minutes, regulators in the U.S. are currently working to cut it to two days from three.
“Consistent with the comment from Chairman Holliday-Smith, the ASX project is proceeding as planned,” Masters said in a telephone interview from Australia. “The early results are very promising.”
Funke Kupper told the ASX board he was stepping down to focus on any potential probe at Tabcorp Holdings Ltd., which he led between 2007 and 2011, according to a statement. Tabcorp said last week that police had started an investigation into the company’s exploration of a business opportunity in Cambodia in 2009.