MAS, SGX successfully use blockchain technology for settlement of tokenised assets

Samantha Chiew

SINGAPORE (Nov 12): The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) have succesfully developed Delivery versus Payment (DvP) capabilities for the settlement of tokenised assets across different blockchain platforms.

DvP is a settlement procedure where securities and monies are simultaneously exchanged to ensure the delivery of securities occurs only if the corresponding payment is made. This will help improve operational efficiency and reduce settlement risks.

This collaboration was announced earlier in August, as one of two spin-offs from Project Ubin. It also demonstrated that DvP settlement finality, interledger interoperability and investor protection can be achieved through specific solutions designed and built on blockchain technology.

To recap, Project Ubin is an industry collaboration to explore the use of Distributed Ledger Technology (DLT) for clearing and settlement of payments and securities, with the aim of understanding DLT’s potential in making financial transactions and processes more transparent, resilient and at lower cost.

Upon completion of this development, MAS and SGX have jointly published an industry report, providing 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 of MAS, says, ““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.”

Tinku Gupta, Head of Technology at SGX and Project Chair, says, ““We are delighted to drive this important industry effort to accelerate innovation in the marketplace. 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.”