Singapore’s Central Bank, Stock Exchange leverage blockchain for settlement of tokenised assets

The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) have successfully developed Delivery versus Payment (DvP) capabilities for the settlement of tokenised assets across different blockchain platforms . This will help 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 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.

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. Following its conclusion, MAS and SGX have 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.

Sopnendu Mohanty, Chief FinTech Officer, MAS, said, “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.”

“Based on the unique methodology SGX developed to enable real-world interoperability of platforms, as well as the simultaneous exchange of digital tokens and securities, we have applied for our first-ever technology patent”, said Tinku Gupta, Head of Technology and Project Chair at SGX.