In a blockchain breakthrough, Singapore’s central bank and the country’s primary stock exchange have successfully developed an automated method for rapid settlements of tokenized assets.
In an announcement on Sunday, the government of Singapore announced the successful development of a Delivery versus Payment (DvP) mechanism – powered by smart contracts – for settlement of tokenized assets over different blockchain platforms.
As reported by CCN in August, the joint endeavor was built upon the blockchain developed by the central bank’s effort to tokenize the Singaporean dollar into a digital currency – dubbed ‘Project Ubin’.
Developed with technology partners Deloitte and Nasdaq alongside blockchain startup Anquan, the DvP prototypes successfully ‘demonstrated that financial institutions and corporate investors are able to carry out the simultaneous exchange and final settlement of tokenized digital currencies and securities assets on different blockchain platforms,” the announcement confirmed.
Sopnendu Mohanty, fintech chief at the Monetary Authority of Singapore, the country’s defacto central bank, stated:
This project has demonstrated the value of blockchain technology and the benefits it can bring to the financial industry in the short to medium term. The concept of asset tokenisation, as wel as other learnings gleaned from this project, can potentially be applied to a broad spectrum of the economy, creating a whole new world of opportunities.
In addition to improved operational efficiency with reduced settlement risks, the successful automation of DvP settlements with smart contracts also demonstrated settlement finality, interledger interoperability and investor protection, an industry report further added.