The Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS) recently unveiled a blockchain-based Delivery versus Payment (DvP) settlement framework. Reports indicate that the framework can simplify post-trade processes, materially diminishing the payment settlement cycle.
DvP Settlement Using Smart Contracts
According to Techwire Asia, the SGX/MAS collaboration is the first of its kind to develop a decentralized technology (DLT) framework for DvP. This new framework enables DvP capabilities for tokenized assets trade.
Usually, DvP settlements take as long as three days after the transaction date. However, the SGX and MAS are confident that the new protocol can help to speed up the process. The project also included other technical partners like Deloitte, Nasdaq, and Anquan.
According to available reports, the blockchain-based DvP platform can perform simultaneous exchanges, as well as final settlement payments for utility tokens and tokenized securities across multiple blockchain networks. It is this interoperability that the project partners hope will improve the speed and efficiency of the entire process.
Blockchain Technology in Capital Markets
In a report jointly published by SGX and MAS, both institutions showed how a blockchain-based DvP settlement framework which utilizes smart contract technology could be of benefit to the market.
Commenting on the value of the initiative, the Chief Fintech Officer of the MAS, Sopnendu Mohanty, said:
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 unveiling of the SGX/MAS blockchain-based DvP settlement framework comes amidst the backdrop of the country’s Fintech Festival. Reports indicate that more than 40,000 people, as well as 250 speakers and over 400 exhibitors, will be at the weeklong event which ends on November 16, 2018.
Singapore Embracing Cryptocurrency and Blockchain Technology
The SGX/MAS blockchain-based DvP platform is yet another milestone for the rapidly evolving digital economy in Singapore. Along with others in Southeast Asia, Singapore appears to be leading the charge to embrace blockchain technology.
Recently, SGX partnered with Temasek Holdings to invest in iSTOX – a security token offerings (STO) platform. The country is also providing an enabling regulatory environment for its local digital currency market. Last month, Live Bitcoin News reported that the MAS was looking to help cryptocurrency businesses with access to banking services.
What do you think about Singapore adopting blockchain technology in the DvP settlement process? Let us know your thoughts in the comment section below.
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