A Consultation Paper released in September stated that the first phase of testing for this new system had been completed and the technology "has met initial capacity tests for ASX's scalability, security and performance requirements for a replacement system when deployed in a permissioned private network."
New Zealand's exchange, the NZX, appears to have not taken such concrete steps, despite being interested in the technology's potential.
"NZX continues to engage with international specialists in this space to understand the opportunities and the challenges blockchain brings," says David Godfrey, Chief Information Officer at NZX.
"Deployed well, blockchain technology could support a true single source for real-time transaction sharing, streamline processes that are currently complex, enhance sharing of data across the industry, create an immutable transaction record -- and perhaps be suitable for a range of other applications that have not yet been contemplated."
However, Godfrey sees challenges in "fundamental market design" that need to be solved. Specifically, the development of a single market blockchain would be preferable to the potential proliferation of a series of independent, private blockchains that could create interoperability challenges.
In the United States, a consortium of 30 large banks and other companies -- including JP Morgan, BP, Microsoft, and UBS -- have formed the Enterprise Ethereum Alliance to coordinate efforts to create a public blockchain. No such co-ordination appears to be under way domestically.
Says Godfrey: "There has been tremendous interest in the potential of blockchain but this has not yet translated into explicit demand for the technology. NZX has discussed various blockchain solutions with market stakeholders and maintains a close watch on how these solutions could develop."
Another example of the scope of potential blockchain applications is reflected in shareholder voting systems. The Nasdaq announced in January that they had successfully completed a test using blockchain technology to run a voting system on its Estonian stock exchange.
However, these are "baby steps", according to Macaskill. "By the time the incumbents have fully adopted blockchain technology in their business models, they may already be disrupted by companies that started with blockchain technology from day one."
And though the big players are eager to broadcast the successes of their trials, Macaskill cautions that the task of larger scale integration is much more challenging.
"There is no infrastructure to connect the blockchain to legacy systems, so they have to be built from scratch," he points out. "Many institutions are piloting projects in an incubation environment, and then tout them as proof of concepts without going through with implementing them in their business models."
Fran Strajnar, CEO of Brave New Coin, a blockchain news and data analysis company, also believes the NZX is not doing enough to explore this new frontier.
"They are largely irrelevant for significant projects to grow, but it would be in their best interest if they upskilled and signed off some development to participate with various key activities both locally and internationally," says Strajnar.
"It would be good if they did come to the party as it would shave some time off certain clearance requirements the larger financial application have, but ultimately the market will move with or without the NZX."
The World Economic Forum's Deep Shift report predicted that by 2027 some 10 per cent of global GDP will be stored on blockchain technology. If that prediction is proved correct, the job for regulators will be a challenging one.
The Financial Markets Authority state that "blockchain can reduce the cost of services like international transfers by creating a reliable and traceable record agreed by all parties. But risks remain around money-laundering, fraud, data theft and traceability."
The recent history of Ethereum is itself reflective of those risks. For all its praise from Blockchain enthusiasts, the platform was the subject of a hack last year resulting in the loss of over $60 million worth of the platform's currency, Ether.
Eventually it was decided by the community to carry out what is called a 'hard fork', essentially rolling back the blockchain to before the hack took place and leaving the hacker with ether that the majority of the Ethereum community did not recognise as legitimate.
Though this may represent a partial solution, Ether's value plummeted over 30 per cent within two days of the hack. Perhaps more importantly, it exposed potential issues for regulators in the future: Should the "hard fork" be allowed for cryptocurrencies that become more widely used in the future?
What happens if the community was more divided over whether they wish to recognise the 'stolen' currency?
Macaskill says the regulators may be redundant in any case, given that many blockchain projects have no particular jurisdiction of operation. "One would have to shut down the internet to shut down these projects."
"Regulation does not address these new business models, and it may not even be possible to regulate them through legislation as they exist across borders. Rather, they end up being regulated by cryptography, code, and global consensus," he says.
It's ICO not an IPO
Stephen Macaskill is CEO of a new platform called the Digital Asset Exchange, which will be launched in the coming months.
The platform will enable the trading of blockchain and cryptocurrency ventures and the raising of funds through ICOs (Initial Coin Offerings).
ICOs which allow investors to purchase coins (the equivalent of shares) in return for funds that will be used to develop the project.
Put simply, this is a trading of blockchain-based assets through a blockchain system.
"Some of these ICOs are done on an already established blockchain, such as Ethereum," says Macaskill.
"Other ICOs are launches of new public blockchains." An example is the ICO of First Blood, an eSports betting platform that reportedly raised $5.5 million within 10 seconds through Ethereum.
Because these ICOs occur on a decentralised ledger, there is no need for a bank to manage the capital raise, and as a result administration costs and friction are reduced.
"A project can raise funds and have them within a matter of weeks, rather than 6-9 months," says Macaskill.
What is Blockchain?
Blockchain is a peer-to-peer platform that allows money and other property to be given to other people without needing to go through a middleman. It uses cryptographic algorithms to protect itself and users' property, creating an immutable and anonymous record of transactions between potentially millions of users.
There are already several operational blockchains in the market with the most popular, Bitcoin, currently worth US$20 billion. Users of Bitcoin rely on no bank and, importantly, have no fees charged for their transactions.
Some blockchain purists see the technology as a way to remove power from global giants like banks and government. Others like banks themselves see blockchain as a technological enabler to massively drive down operational expenditure.
How does it work?
The computers' processing transactions on a blockchain collate a number of transactions and put them through a series of cryptographic functions creating a "block" of transactions.
The block of transactions is then compared with the existing blockchain so that the system can guarantee when a party tries to send money, there is proof in the blockchain (which acts as an audit trail) that they actually have the money.
Once this is completed, the block will formally be added to the blockchain. Once all of this processing is completed, all computers on the blockchain update the record so that the exact same information is held by all parties.
This 'distributed ledger system' makes it almost impossible for one bad actor to change how much money they have as their record would conflict with every other record.
In the Bitcoin Blockchain, the platform can process 25 transactions per second, and many other platforms like Ethereum or Hyperledger can process even more.
What can it be used for?
Beyond trading cryptocurrencies, businesses have begun applying blockchain to a variety of other industries and use cases. It can be used for identity management with the Estonian government developing a blockchain digital identity system, for example as well as ownership verification, voting, creating smart contracts, and more.
