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Singapore Exchange Invests in Blockchain Technology for Rapid Securities Settlement

August 27, 2018 19:06
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Singapore’s primary stock exchange, Singapore Exchange (SGX) is investing big in increasing its blockchain capabilities in a bid to improve its securities settlements. For the purpose, it has collaborated with the country’s central bank Monetary Authority of Singapore (MAS), the exchange has said in its release on Friday.

The partnership is aimed at scaling up the country’s Delivery versus Payment (DvP) capacity in order to automate transactions via blockchain-based smart contracts. DvP mechanism ensures assets are only transacted only when the payments are cleared. The partnership will receive support from leading financial and consultancy firms like Nasdaq and Deloitte and as well as blockchain startup Anquan.

The goal of the partnership is to develop a distributed network where financial institutes and customers will be able to transact securities which will be converted into digital tokens through various blockchain platforms while eliminating security risk and improve operational efficiencies.

In the press release it stated, the technology will be developed based on open source code resulting from the latest development of Project Ubin, which the MAS initiated in 2016 to test out settling interbank transactions. Under the project, its central bank has already issued digital token of the Singapore dollar on private Ethereum blockchain during the first trial phase last year.

SGX’s Head of Technology and project chair Tinku Gupta said:

“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.”

Sopnendu Mohanty, FinTech chief at Singapore’s central bank, also added:

“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.” 

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