BY CNA Team - November 12, 2018
Singapore successfully trials crypto asset settlements platform
Singapore is moving forward in the development of infrastructure facilitating the trade of tokenised assets through blockchain platforms.
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) jointly announced on Nov 11 that they have successfully developed delivery versus payment (DvP) capabilities for the settlement of tokenised assets across different blockchain platforms.
DvP will help simplify post-trade processes and further shorten settlement cycles. It will help financial institutions and corporate investors to carry out the simultaneous exchange and final settlement of tokenised digital currencies and securities assets on different blockchain platforms.
“The ability to perform these activities simultaneously improves operational efficiency and reduces settlement risks,” they say.
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.
With the development of the DvP capabilities, MAS and SGX have also jointly published an industry report, which provides a comprehensive view of automating DvP settlement processes with smart contracts.
“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,” they add.
MAS’ chief fintech officer Sopnendu Mohanty says in the same announcement that the 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,” he says.
SGX technology head/project chair Tinku Gupta says the exchange has applied for its first-ever technology patent based on the unique methodology developed to enable real-world interoperability of platforms, as well as the simultaneous exchange of digital tokens and securities.
Image courtesy of The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) website.