Blockchain for Settlement Layer Infrastructure Taps Singapore Stock Exchange

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To investigate the use of blockchain technology for settling asset transactions, the Singapore Stock Exchange (SGX) has collaborated with investment company Temasek. With many partnerships with both public and private institutions in the city-state, Temasek remains a leading player in Singapore’s growing use of decentralized ledger technology (DLT).

Building Blockchain Settlement System SGX and Temasek

Temasek and SGX have announced a joint venture partnership to use blockchain for funding purposes, according to a Nikkei Asia report on Friday (Jan. 22, 2021). The two firms will build a JV business as part of the partnerships that will examine ways to exploit DLT to issue and settle transactions of SGX-listed securities, including bonds and equities.

Lee Beng Hon, the head of SGX currencies, revenue, and commodities, reporting on the relationship, noted:

“We are very excited to take our digital asset business to the next level in partnership with Temasek. Together (with Temasek), we will capitalise on digitalisation trends that continue to shape global capital markets, and advance the development of capital markets infrastructure in Asia.”

“We have been tracking the evolution of financial market systems and the opportunities for the development of digital infrastructure that will transform how financial transactions are conducted.”

The business is pleased to collaborate with SGX again with Temasek Managing Director Pradyumna Agrawal, adding:

The step expands the blockchain presence of SGX. As previously reported, back in November 2018, the stock exchange collaborated with the Monetary Authority of Singapore (MAS) to establish a tokenized asset blockchain-based settlement infrastructure.

SGX also partnered with Temasek and HSBC Holdings in August 2020 to pilot Asia’s first ever public syndicated blockchain bond. At the point, on behalf of Olam, an agro-based business group, the alliance issued a digital bond. SGX also owns a 10 percent stake in the newly launched DBS digital asset exchange, the biggest lender in Southeast Asia as a whole.

The ongoing blockchain foray of SGX is also indicative of the rising usage of DLT in the city-state as well as in Southeast Asia as a whole. Singapore’s government also revealed proposals for a $9 million blockchain funding kit in December 2020. A DLT-based framework for bilateral trading with Australia is also being discussed by the city-state.

This rising emphasis on DLT and blockchain has also culminated in regulators moving to formalize the burgeoning industry’s current legal structure. The MAS was granted the authority to supervise the activities of Singapore’s blockchain and digital payment providers earlier in January.

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