Singapore government develops blockchain based security token system

Mattie Hesen

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The Monetary Authority of Singapore (MAS) in collaboration with the Singapore Exchange (SGX) has been developing an automated Delivery versus Payment (DvP) platform. The platform aims to allow the settlement of tokenized securities across various blockchain platforms.

The announcement was made over the weekend during which the MAS and SGX stated:

 “This will help simplify post-trade processes and further shorten settlement cycles,(…)”

Reports describing the DvP system say it works with payment and product transfers at the same time making sure securities are delivered only when the payment is performed.

Several prominent technology partners have participated in developing the DvP system, specifically Nasdaq, Anquan, and Deloitte.

DvP prototypes have already been tested for settlements using various digital tokens on multiple blockchain platforms. The two companies have already published an industry report describing payment settlement using smart contracts. Sopnendu Mohanty, MAS chief officer said:

“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 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.”

Magnus Haglind, Nasdaq senior vice president explains:

 “In collaborating with SGX and MAS on this unique ecosystem of converging blockchains, we have demonstrated how to create interoperability between multiple networks to secure settlement between different assets – this is a major step in the application of blockchain to the capital markets,”

SGX head of technology and project chair, Tinku Gupta, added:

“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.”

‘Ubin’, a collaborative project with the financial services industry is the direct precursor of the current DvP system which was initially announced in August 2018.

Right now, Singapore is hosting ‘token day’ which lasts three weeks from October 31 to November 18. During ‘token day’ vendors in Singapore’s Chinatown area will be accepting crypto payments. The purpose of the event is to raise crypto awareness and encourage use and adoption.