Singapore’s MAS & SGX Develop Blockchain Based Security Tokenized Asset

The Monetary Authority of Singapore has joined forces with the country's Exchanges to develop a Delivery versus Payment system for tokenized asset. What are the advantages of this blockchain technology?

November 13, 2018 | AtoZ Markets - The Monetary Authority of Singapore (MAS) in collaboration with the with the Singapore Exchange Limited (SGX) have successfully developed an automated Delivery versus Payment (DvP). This new technology allows settlements for tokenized securities across various blockchain platforms.


Singapore Government Creates Technology for settlement of Tokenised Assets

This announcement was made by both the MAS and SGX over the weekend and according to the press release, the new blochchain technology is set to, “help simplify post-trade processes and further shorten settlement cycles.” 

As per the release, the DvP system is designed to operate simultaneously with payment and product changing hands and ensuring that once payment is made, securities are delivered immediately.

The report further reveals that the system on trial began in August 2018 shortly after MAS and SGX had collaborated with a Singaporean tech company, Anquan, and also a consulting firm, Deloitte as well as US stock market, Nasdaq.

Advantages of Delivery Versus Payment System

The tested Prototypes of the DvP have shown that financial institutions and corporate investors can make settlements in various digital tokens simultaneously on different blockchain platforms.

MAS and SGX believe that this technology is capable of increasing operational efficiency and can also minimize settlement risks. Furthermore, with the use of smart contracts, the technology could further help automate DvP settlement processes. 

Mr. Sopnendu Mohanty, MAS Chief FinTech Officer, stated:

“Blockchain technology and asset tokenization are fuelling a new wave of innovation globally. 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 tokenization, as well 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.”

Ms. Tinku Gupta, SGX Head of Technology and Project Chair, commented:

“We are delighted to drive this important industry effort to accelerate innovation in the marketplace. Based on the unique methodology SGX developed to enable real-world interoperability of platforms, as well as the simultaneous exchange of digital tokens and securities, we have applied for our first-ever technology patent.”

Singapore's MAS Hasn't Seen Any Tokens as Securities Yet

Earlier, AtoZMarkets reported that Singapore's MAS are yet to see any tokens as securities despite more than 1,000 tokens they acknowledge.

The head of Technology Infrastructure, Damien Pang reached this conclusion at the Coindesk's Consensus Singapore 2018.

The regulatory body took into consideration the past, current and future characteristics of tokens, and not only the underlying technology but the categorization could also change over time.

Last November, MAS issued a guide to digital token offerings while the central bank was reviewing if more regulations are required to safeguard investors from the potential risks posed by cryptocurrencies.

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