Singapore Stock Exchange Working on Blockchain System for Faster Securities Settlements

27. Aug 2018 Posted by Daniel D on News

Singapore’s stance towards digital currencies and blockchain technology is fairly open-minded, granted that the country’s stock exchange is reportedly working with the Monetary Authority of Singapore (MAS), to develop a blockchain platform that would make securities settlements more efficient.

In a recent press release, the Singapore Stock Exchange (SGX) noted that the project aims to increase its Delivery vs. Payment (DvP) capacity, by enabling transaction automation via blockchain smart contracts. To put things better into perspective, DvP is a settlement service which ensures that asset transactions are only made after the afferent payments are received by the entity.

With this in mind, the ultimate goal would be to build a distributed network where investors alongside financial institutions can transact tokenised securities via a variety of blockchain-based platforms.

In a recent press statement, Tinku Gupta, the SGX’s head of technology, mentioned: "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."

For the development, the SGX will employ support from several companies, such as NASDAQ, Deloitte and Anquan. Additionally, the release also mentioned that the project will be engineered on the open-source code of Project Ubin, a MAS-backed system aimed at settling interbank transactions using blockchain technology.

The institutions will proceed to release an examination report of the key design considerations in November.

It is important to keep in mind that the SGX isn’t the only institution looking to rely on blockchain for faster securities settlements. In fact, the Australia Securities Exchange is working on a similar project that will likely be rolled out in 2020.

Based on everything that has been outlined so far, financial institutions throughout the world are finally noticing the potential of blockchain technologies. Such projects are likely to speed up worldwide blockchain adoption, thus giving people access to quicker, cheaper and more secure financial services.