Singapore’s Stock Exchange Plans To Utilize Blockchain For Increased Efficiency Of Payments

The stock exchange in Singapore recently revealed its plans which include working with the Monetary Authority of Singapore (MAS) as the city-state’s de facto central bank – all in order to tap blockchain in a bid to improve the efficiency of the securities settlement.

As the Singapore Exchange (SGX) said in an official release:

“…the collaboration is aimed to scale up the country’s Delivery versus Payment (DvP) capacity so that it’s able to automate transactions via blockchain-based smart contracts.”

Meanwhile, DvP is a settlement process that will allow the transaction of assets only when corresponding payments are received. In that way, SGX will also receive major support from companies like Nasdaq, Deloitte and the blockchain startup Anquan, as the announcement reads.

The main goal of this project is to develop a network where financial institutions and investors can transact securities that have been converted into digital tokens on different blockchain platforms.

According to the engineers behind this project, the technology will be designed on the open source code which was initiated for the latest development of the Project Ubin, which was initiated in 2016 as a way to settle domestic interbank transactions.

The project chair and SGX head of technology at SGX, Tinku Gupta, also commented in the announcement, stating:

“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.”

Meanwhile, the Singapore Stock Exchange (SGX) is not the only securities trading platform tapping blockchain. The Australia Securities Exchange is also working towards replacing its existing settlement system with a distributed ledger technology alternative – which is expected to commence in 2020.