Blockchain startup Digital Asset Holdings raises $52m, signs deal with Australian Stock Exchange


Blockchain startup Digital Asset Holdings, LLC has raised $52 million in a new round from a range of leading financial institutions including ABN AMRO, Accenture, ASX, BNP Paribas, Broadridge Financial Solutions, Citi Group, CME Ventures, Deutsche Börse Group, ICAP, J.P. Morgan, Santander InnoVentures, The Depository Trust & Clearing Corporation (DTCC) and The PNC Financial Services Group.

Launched in 2015, Digital Asset is aiming to improve efficiency, security, compliance and settlement speed within financial systems by designing its own version of the Blockchain, the distributed digital ledger that powers Bitcoin.

The company creates what it calls tailored business logic applications using privately permissioned networks that employ a cryptographically secure and shared infrastructure with an aim of delivering software with the potential to significantly improve post-trade processing efficiency and security while reducing cost, latency, errors, risk and capital requirements.

“These investments represent a tremendous endorsement of Digital Asset from banks, exchanges, settlement and clearing firms, central securities depositories, and market infrastructure and professional services providers,” Digital Asset Chief Executive Officer Blythe Masters said in a statement. “Our strategic investors have come together from across the financial services industry to help drive global adoption of transformative solutions which enhance the vital services that they provide.”

ASX deal

Along with the new funding, Digital Asset also announced that it had signed a deal with ASX Ltd., the Australian Stock Exchange, that will see it using the Blockchain to radically speed up settlement on the exchange.

According to Fairfax Media, the ASX Blockchain will be a private network that will be utilized by members of trading firms who currently plug into the Clearing House Electronic Sub-register (CHESS) system that was first implemented by the exchange as a replacement to paper transfers of stocks over 1994 and 1995.

The new system will first run as a trial alongside CHESS with a decision in 2017 as to whether to adopt it for settlements across the entire exchange.

“We can now trade equities in 150 microseconds, then it takes two days to settle. That makes no sense,” ASX Chief Executive Officer Elmer Funke Kupper told Bloomberg Business. “A retail investor in Australia should be able to sell their shares, go to the nearest ATM and get their cash out.”

“The moment we started to think about it, we realized that this is about much more than replacing our back-office systems,” he added. “This is the first opportunity in 20 years to re-engineer the way the market operates end-to-end. We should not miss that opportunity.”

We named 2015 as the year the Blockchain came of age and this is the first big announcement of the new year around the technology even if bizarrely Digital Asset and the financial institutions investing in the company are refusing to call it that and are instead referring to it simply as “Distributed Ledger Technology.”

Digital Asset itself, despite primarily looking to profit from the Blockchain, is doing some good things for the community as a whole, having handed over its Hyperledger platform to the Linux Foundations Bitcoin Blockchain initiative back in December.

Image credit: cimexus/Flickr/CC by 2.0