MAS and SGX apply blockchain tech for settlement of tokenised assets

MAS and SGX apply blockchain tech for settlement of tokenised assets

The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) claim to have successfully developed Delivery versus Payment capabilities for the settlement of tokenised assets across different blockchain platforms.

The collaborative effort marks the latest phase of Project Ubin, a Monetary Authority of Singapore-led initiative to see how DLT can be used for the clearing and settlement of payments and securities, specifically the use of a tokenised form of the Singapore dollar on a distributed ledger.

The DvP prototypes, developed with technology partners Anquan, Deloitte and Nasdaq, demonstrated that financial institutions and corporate investors are able to carry out the simultaneous exchange and final settlement of tokenised digital currencies and securities assets on different blockchain platforms.

Tinku Gupta, head of technology at SGX and project chair, says: “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.”

MAS and SGX have jointly published an industry report, which provides a 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.

The latest update was delivered at the week-long Singapore Fintech Festival, where MAS also unveiled a set of principles to promote fairness, ethics, accountability and transparency in the use of artificial intelligence (AI) and data analytics in finance.

Known as the FEAT Principles, the document provides guidance to firms offering financial products and services on the responsible use of AI and data analytics, to strengthen internal governance around data management and use.

MAS is also partnering with GlobalLinker1, Mastercard, SAP, Yellow Pages, DBS ad SingTel to develop a proof of concept to demonstrate the use of AI tools for digitising the small business market. The project will entail the creation of a sandbox environment for testing products with anonymised SME data, an SME services app store, and an AI engine for matching demand and supply for products and services among SMEs.

The Singapore Fintech Festival, which is welcoming close to 40,000 participatant from 100 different countries, will provide a rich source of news this week, including reports on a new project by MAS and Bank of Canada to link their respective blockchain platforms to explore the possibility of instant, 24/7 settlement of cross-border payments transactions.

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