The Monetary Authority of Singapore and Singapore Exchange said on Friday that they entered a tie-up to develop Delivery versus Payment (DvP) services to settle trades of tokenized assets on different blockchain platforms.
“This will allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenized digital currencies and securities assets, improving operational efficiency and reducing settlement risks,” it said in the press release filed to SGX on Friday.
DvP is a settlement method in which securities and money are simultaneously exchanged, to ensure that security delivery only occurs if the payment is made, it said.
Three companies, Anquan, Deloitte and Nasdaq were appointed as the technology partners for the project and they will build on the open-source software developed phase two of Project Ubin, which started in 2016 as an industry effort to explore using distributed ledger technology (DLT) for clearing and settlement of payments and securities, it said.
The project will examine and produce a report by November on potentially automating DvP settlement methods with Smart Contracts, which are self-executing contracts where the terms are written as software code to be executed when pre-defined conditions are fulfilled, the press release said.
“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. This is a collaborative innovation,” Tinku Gupta, head of technology at SGX and the project chair, said in the statement.
Sopnendu Mohanty, chief fintech officer at MAS, added that the ability to transact “seamlessly” across blockchains would open up new business opportunities.
“The involvement of three prominent technology partners highlights the commercial interest in making this a reality,” he added.