MAS and SGX Seek Blockchain Settlements For Tokenizing Assets Using Delivery versus Payment (DvP)


On 24 August 2018, the Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) announced their collaboration to develop Delivery versus Payment (DvP) capabilities for settlement of tokenized assets across different blockchain platforms. They will partner with the following in this project:

  1. Anquan Build innovative, high performance applications using their core technology engines.
  2. Deloitte – The largest professional services network in the world by revenue, and
  3. Nasdaq – the second-largest exchange in the world by market capitalization.

    “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. We expect to see further growth in this space as FinTechs leverage on the strong pool of talent and expertise in Singapore to develop innovative blockchain applications and benefit from the new opportunities created.”

    “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 bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem.”

MAS is Singapore's central bank and financial regulatory authority. DvP is a securities industry settlement procedure in which the buyer's payment for securities is due at the time of delivery i.e. the payment must be made prior to or simultaneously with the delivery of the security.

Strategic Partnerships

The partners will leverage on the open-source software developed and available in Phase 2 of Project Ubin, a collaboration to explore the use of Distributed Ledger Technology (DLT) for clearing and settling payments and securities. They will produce a report, to be released by November 2018, that examines the potential of automating DvP settlement processes with Smart Contracts. (Smart Contracts are self-executing contracts where contractual terms or are set as software code to be executed upon the fulfillment of pre-defined conditions). They will also identify the key considerations to ensure enhanced protection of investors.

Chief FinTech Officer of MAS, Sopnendu Mohanty commented:

“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. We expect to see further growth in this space as FinTechs leverage on the strong pool of talent and expertise in Singapore to develop innovative blockchain applications and benefit from the new opportunities created.”

The Head of Technology at SGX, and Project Chair, Tinku Gupta, also commented on the project:

“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 bringing together multiple players to pursue real-world opportunities that will benefit the ecosystem.”

According to the statement, the development of DvP capabilities for settlement of tokenized assets across different blockchain platforms will allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenized digital currencies and securities assets. This will improve operational efficiency and reduce settlement risks.

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