SINGAPORE - The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) will collaborate with Anquan, Deloitte and Nasdaq to develop Delivery versus Payment (DvP) capabilities for settlement of tokenised assets across different blockchain platforms, the Singapore parties announced on Friday (Aug 24).
DvP is a settlement procedure in which securities and payments are simultaneously exchanged to ensure that the securities are delivered if and only if the corresponding payment is made, while tokenised assets are ones which have had their ownership rights converted to digital tokens that can be bought and sold.
DvP capabilities for tokenised digital currencies and securities assets would improve operational efficiency and reduce settlement risks for financial institutions and corporate investors by allowing them to carry out simultaneous exchange and final settlement for such assets, SGX and MAS said in their joint statement.
Technology partners Anquan, Deloitte and Nasdaq will leverage open-source software developed and made publicly available in Phase 2 of Project Ubin, an industry collaboration started in November 2016 to explore the use of Distributed Ledger Technology (DLT) to clear and settle payments and securities.
At the end of the project, they will produce a report by November 2018, which will examine the potential of automating DvP settlement processes with Smart Contracts and identify key design considerations to ensure resilient operations and enhanced protection for investors.
"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," said head of technology at SGX and project chair Tinku Gupta.
"This is a collaborative innovation bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem."
MAS chief fintech officer Sopnendu Mohanty added: "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.
"The involvement of three prominent technology partners highlights the commercial interest in making this a reality."