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Singapore’s stock exchange, central bank jointly develop blockchain settlement system

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The Monetary Authority of Singapore (MAS) and the Singapore Exchange (SGX) have jointly developed a system for settlement of tokenised assets across different blockchains, industry website Coindesk has reported, citing an official press release by the country’s Ministry of Communications and Information.

According to the October 11 announcement, the new “Delivery versus Payment” (DvP) system will help simplify post-trade processes and further shorten settlement cycles. The system aims to achieve that with the help of smart contracts. The system builds upon project Ubin, which was launched two years ago as an industry collaboration to explore the use of distributed ledger technology (DLT) for clearing and settlement of payments and securities.

The announcement states that DvP prototypes, which were developed in partnership with Nasdaq, Deloitte and Anquan, showed that “financial institutions and corporate investors are able to carry out the simultaneous exchange and final settlement of tokenised digital currencies and securities assets on different blockchain platforms”. This improves operational efficiency and reduces settlement risks.

Sopnendu Mohanty, chief FinTech officer at MAS commented in the press release: “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.” Mohanty also said that the same concept could potentially be applied to other sectors of the economy to create “a whole new world of opportunities”.

Meanwhile, SGX’s head of technology Tinku Gupta revealed that the company was looking to secure a patent, its first ever, for the “unique methodology” it had developed to “enable real-world interoperability of platforms, as well as the simultaneous exchange of digital tokens and securities”.

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