Singapore’s central bank has signed a deal bringing together ‘big four’ accounting and services firm Deloitte, Nasdaq and blockchain startup Anquan for the Singapore Stock Exchange (SGX) to ease digital asset settlements using blockchain technology.
The aim is to develop Delivery-versus-Payment (DvP) capabilities, a commonly used procedure for settling trades of securities, across different blockchain platforms. MAS’ chief fintech officer, Sopnendu Mohanty cited that the “involvement of three prominent technology partners highlights the commercial interest in making this a reality.”
According to an announcement by the Monetary Authority of Singapore (MAS) and SGX, the partnership will allow financial institutions and corporate investors to:
“carry out simultaneous exchange and final settlement of tokenised digital currencies and securities assets, improving operational efficiency and reducing settlement risks”.
MAS launched a blockchain initiative, entitled ‘Project Ubin’ in 2016, with the aim of cautiously creating a cryptocurrency-friendly jurisdiction in Singapore by 2020. MAS’ Mohanty stated:
“This is a collaborative innovation bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem.”
Project Ubin, a partnership between MAS, blockchain start-up R3, and a consortium of global financial institutions, including the Bank of America, Merrill Lynch, Credit Suisse, DBS Bank and OCBC Bank, has already created a digital token for the Singapore dollar on the ethereum blockchain.
The first phase of the initiative was focused primarily on domestic inter-bank payment settlements, now in it’s second phase, it is focusing on the use of blockchain for gross settlements, where money is transferred between banks in real time. SGX’ head of technology, Tinku Gupta, who is also leading Project Ubin, stated:
“This initiative will deploy blockchain technology to efficiently link up funds transfer and securities transfer, eliminating both buyers’ and sellers’ risk in the DvP process,”
Certainly every stock exchange is investing in this nascent technology, as per a previous BCTech Report, UAE’s Abu Dhabi Stock Exchange ADX signed a blockchain deal with UK fintech startup EquiChain.
There is an abundance of blockchain projects, pilots and trials throughout the financial world, from the World Bank issuing its first blockchain Bond, to IBM trialling a financial blockchain “app store” with Barclays on Hyperledger.