Singapore Stock Exchange Turns to Blockchain for Rapid Settlements

Singapore’s primary stock exchange has announced a working partnership with the country’s central bank to develop a blockchain platform for securities’ settlements.

In an announcement on Friday, the Singapore Exchange (SGX) revealed details of a new working partnership with the Monetary Authority of Singapore (MAS) – the country’s central bank – to enhance Singapore’s Delivery versus Payment (DvP) capacity with automation powered by blockchain smart contracts.

The project will use and build upon the blockchain developed by the central bank’s own effort to tokenize the Singaporean dollar into a digital currency, part of its ‘Project Ubin’ initiative.

Ultimately, the effort sees the objective of developing a DvP mechanism that enables institutions to transact and settle securities – tokenized digitally – across different blockchain platforms while eliminating securities risks and improving operational efficiency.

The joint-endeavor “will allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenized digital currencies and securities assets, improving operational efficiency and reducing settlement risks,” the SGX said.

SGX head of technology and project chair Tinku Gupta 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.”

A similar announcement by Singapore’s central bank highlighted stock exchange giant Nasdaq, ‘big four’ accounting and services firm Deloitte and blockchain startup Anquan as the initiative’s technology partners.

“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,” Sopnendu Mohanty, fintech chief at Singapore’s central bank, was quoted as stating.

A proactive mover in researching blockchain technology, Singapore’s central bank has already issued digital tokens of the Singaporean dollar on a private Ethereum blockchain during a Phase 1 trial of Project Ubin last year.

Featured image from Shutterstock.

Last modified: March 4, 2021 3:34 PM

Samburaj Das

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