The Hong Kong Stock Exchange (HKEX) is looking to follow its Australian counterpart in developing a blockchain settlement system.

According to the Financial Times, Charles Li, head of the HKEX, said on Tuesday that the company is currently in dialogue with the Australian Securities Exchange (ASX) to learn from its experience in settling transactions over a blockchain system.

The plan, according to Li, would ultimately be to utilize a blockchain platform to settle stock borrowing and lending, as well as over-the-counter trades, at a reduced cost compared with traditional methods.

While the stock exchange has previously announced an initiative in developing a blockchain-based private market to finance smaller enterprises, Li said technology vendors were not able to lend sufficient support and the HKEX is not interested in taking the effort in-house.

That said, Li still hopes to beef up the exchange's blockchain efforts by following the technological progress and vendor relationships seen by the ASX.

"Let’s use this cheap technology to do something that doesn’t affect the central order book," he was quoted as saying.

As reported by CoinDesk, the ASX announced last December that, using technology developed by blockchain startup Digital Asset, it has set to become the first stock exchange to shift one of its main services to a blockchain-based system.

Stock index image via Shutterstock