Bursa Malaysia Stock Exchange Readies Blockchain Proof Of Concept To Lend And Borrow Securities

Blockchain Poc Set For Development By Malaysia's Stock Exchange For Security Lending And Borrowing

On the 6th of May 2019, Bernama, a local media outlet in Kuala Lumpur, reported that Bursa Malaysia, Malaysia’s stock exchange based in Kuala Lumpur, is in the process of developing a PoC(proof of concept) for security borrowing and lending on the blockchain technology.

As reported, the purpose of this development is to improve transparency and address other issues faced insecurity borrowing and lending in the country.

Benefits OF The Proof Of Concept

Datuk Muhammad Umar Swift, the CEO of Bursa Malaysia, reportedly stated that the PoC would improve the speed, efficiency, and capacity in the security borrowing and lending process, which will, in turn, improve demand.

The CEO, Swift, stated that the benefits of the Proof-of-concept (PoC) are not only limited to Bursa Malaysia customers.

He said:

“The collaboration also benefits the wider industry through new knowledge, insights and practical experience in harnessing digital innovation to support and drive the growth of the capital market.”

Bernama, the media outlet claimed that this has never been done in any ASEAN(Association of Southeast Asian Nations) member state in the past.

Involved Companies

The PoC was developed in collaboration with Syntron Information, their Hong Kong-based technology partner.

The following firms will be involved in the PoC process :

1. CIMB Investment Bank Bhd
2. Affin Hwang investment bank Bhd
3. Retirement Fund incorporated
4. Malacca Securities
5. Citibank Bhd

Blockchain In Other Stock Markets

Nikhil Rathi, the CEO of London Stock Exchange, one of the oldest stock exchanges in the world, believes that blockchain would play a key role in the issuance of settlements and securities.

There were also reports in March 2019 that Bolsas y Mercados Españoles a major stock market operator in Spain, had completed a system for issuance of collateral pledges and electronic certificates based on blockchain technology.