Hong Kong Stock Exchange Taps Digital Asset for Post-Trade Blockchain Trial

The Hong Kong Stock Exchange has teamed up with distributed ledger startup Digital Asset to develop a blockchain platform for post-trade processing.

The two firms are exploring the development of a blockchain-powered platform for HKEX's Northbound Stock Connect program, a spokesperson for HKEX told CoinDesk.

The Australian Securities Exchange in putting settlement transactions on a blockchain-based platform.

Notably, Digital Asset is also developing that platform as part of a plan to replace the ASX's ageing CHESS clearing house system by 2021.

Launched in 2014, Northbound Stock Connect allows international and mainland Chinese investors to trade securities in each other's markets through the trading and clearing facilities of their home exchanges.

HKEX said it has already completed a functional prototype along with Digital Asset aimed to resolve these issues.

The trial system enables the real-time synchronization of post-trade status between asset managers, brokers, custodians and the Hong Kong Securities Clearing Company Limited - HKEX's securities clearing house.

Elsewhere, a number of stock exchanges are eyeing blockchain as a means to improve clearing and settlement, and other processes, including in Singapore and India.

Just last week, Germany's central bank, and Deutsche Börse, owner of the Frankfurt Stock Exchange, completed a blockchain trial investigating the technology's potential in securities settlement.

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