Singapore Exchange and regulator seek cross-DLT settlement
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) have signed a collaboration to develop delivery versus payment (DvP) capabilities for settlement of tokenised assets across different blockchain platforms.
For clarification, DvP is a settlement procedure where securities and monies are simultaneously exchanged to ensure that delivery of securities occurs only if the corresponding payment is made.
This will allow financial institutions and corporate investors to carry out these trades, including tokenised digital currencies and securities assets, with the aim to enhance operational efficiency and reduce settlement risks.
“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,” says Tinku Gupta, head of technology at SGX and project chair. “This is a collaborative innovation bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem.”
“Blockchain technology is radically transforming how financial transactions are performed today, and the ability to transact seamlessly across blockchains will open up a world of new business opportunities,” adds Sopnendu Mohanty, chief fintech officer of MAS.
Anquan, Deloitte and Nasdaq have been appointed as technology partners for this project.
These firms will leverage the open-source software developed and made publicly available in Project Ubin Phase 2. This project is an industry collaboration to explore the use of blockchain for clearing and settlement of payments and securities.
The project will produce a report that examines the potential of automating DvP settlement processes with smart contracts to identify key design considerations in building resilient operations. The report will be released by November 2018.
This year, MAS issued guidance to financial institutions on the use of technology solutions for non-face-to-face customer onboarding.
More recently, MAS helped push the FinTech Fast Track in Singapore, through its Financial Sector Technology and Innovation (FSTI) funding scheme.
