The Australian Securities Exchange (ASX) is seriously considering replacing its current clearing and settlement system with blockchain technology, reports claim.

According to the Sydney Morning Herald, ASX CEO Elmer Funke Kupper said blockchain technology could help cut the cost and time associated with its Clearing House Electronic Subregister System (CHESS).

The CEO added:

He continued: "We're thinking about whether there are smarter ways to do things – to remove a lot of administrative costs and reconciliation costs from the back end of investment banking and broking, and this is where blockchain could be potentially quite helpful."

The upgrade of ASX's clearing and settlement system is expected to begin by the end of next year.

Funke Kupper's comments come after the National Bank of Australia and the Commonwealth Bank of Australia – which is experimenting with Ripple's technology – joined distributed ledger startup R3CEV's project, which seeks to develop standards to spread the use of blockchain technology within the wider financial industry.

The news also follows reports that various banks in Australia had decided to shut down the accounts of bitcoin operating businesses in the country. The closures are currently being investigated by the Australian Competition and Consumer Commission (ACCC).

Sydney image via Shutterstock