Singapore Stock Exchange, MAS Partner To Develop Blockchain Solution For Tokenized Aassetsbr>
Singapore Exchange (SGX) is collaborating with the Monetary Authority of Singapore (MAS) to develop Delivery versus Payment (DvP) capabilities for settlement of tokenized assets across different blockchain platforms.
SGX is an investment holding company that provides different services related to securities and derivatives trading. As of February 2017, there were 754 listed companies, excluding GDRs, hedge funds and debt securities, on the Singapore Exchange with a market capitalization of SGD 977.097 billion ($700B USD).
MAS is Singapore’s central bank and financial regulatory authority. It administers the various statutes pertaining to money, banking, insurance, securities and the financial sector in general, as well as currency issuance. It has been entrusted to promote monetary stability, and credit and exchange policies conducive to the growth of the economy.
The collaboration is aimed at allowing financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenized digital currencies and securities assets, which will improve operational efficiency and reduce settlement risks.
Professional service firm Deloitte, blockchain startup Anquan and Nasdaq have been appointed as technology partners for the project. These companies will use the open-source software developed and made publicly available by MAS in November 2017 to examine the potential of automating DvP settlement processes with smart contracts. The goal is to identify key design considerations to ensure resilient operations and enhanced protection for investors. A detailed report will be released by November.
Tinku Gupta, Head of Technology at SGX and Project Chair, said that the project will deploy blockchain technology to efficiently link up funds transfer and securities transfer, eliminating both buyers’ and sellers’ risk in the DvP process.
“This is a collaborative innovation bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem,” Gupta said.
Sopnendu Mohanty, Chief FinTech Officer of MAS, said that blockchain technology is radically transforming how financial transactions are performed today, and the ability to transact seamlessly across blockchains will open up a world of new business opportunities.
“The involvement of three prominent technology partners highlights the commercial interest in making this a reality,” Mohanty said. “We expect to see further growth in this space as FinTechs leverage on the strong pool of talent and expertise in Singapore to develop innovative blockchain applications and benefit from the new opportunities created.”