SINGAPORE: The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) have successfully developed delivery versus payment (DvP) capabilities to allow for the simultaneous exchange of tokenised assets across different blockchain platforms for securities.
The move helps simplify post-trade processes and further shorten settlement cycles.
The DvP prototypes, developed with technology partners Anquan, Deloitte and Nasdaq, demonstrated that financial institutions and corporate investors are able to carry out simultaneous exchange and final settlement of tokenised digital currencies and securities assets on different blockchain platforms.
The project is a collaboration MAS and SGX announced in August this year, one of two spin-offs from Project Ubin, to explore the use of Distributed Ledger Technology for clearing and settlement of payments and securities.
The collaboration also demonstrated that DvP settlement finality, interledger interoperability and investor protection can be achieved through specific solutions designed and built on blockchain technology.
MAS and SGX have jointly published an industry report which provides a comprehensive view of automating DvP settlement processes with Smart Contracts, or self-executing contracts upon the fulfilment of predefined conditions.
The report also identifies key technology and operational considerations to ensure resilient operations, and defines a market framework that governs post-trade settlement processes such as arbitration.
“Blockchain technology and asset tokenisation are fuelling a new wave of innovation globally. This project has demonstrated the value of blockchain technology and the benefits it can bring to the financial industry in the short to medium term. The concept of asset tokenisation, as well as other learnings gleaned from this project, can potentially be applied to a broad spectrum of the economy, creating a whole new world of opportunities,“ MAS chief fintech officer Sopnendu Mohanty said.
