SG Succeeds In Tests for Digital Token Asset Settlement

Nov 13, 2018 at 0:47

Singapore Exchange Limited (SGX) has successfully tested the use the blockchain technology for tokenized assets settlement.

In a statement posted on its website, SGX said the blockchain-driven solution for Delivery versus Payment (DvP) capabilities is seen to “simplify post-trade processes and further shorten settlement cycles.”

With this development, the exchange filed its first ever patent for the project, said Tinku Gupta, SGX’s Head of Technology.

“Based on the unique methodology that 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,” he said.

The result of tests, which were conducted as early as August, demonstrated that the DvP prototypes allowed financial institutions and investors “to carry out the simultaneous exchange and final settlement of tokenized assets on different blockchain platforms.”

SGX views the development as promoting operational efficiency and reducing settlement risks in areas where the platform can be applied. The technology is also seen to establish automation in the DvP settlement processes via the use of smart contracts.

A more comprehensive report on the tests was published, which stated that the smart contracts for DvP “could enable the consistent and coherent implementation of rights and obligations that will increase investor confidence and reduce compliance costs in the market.”

The tests were conducted along with the Monetary Authority of Singapore.

The solution was developed with US stock exchange Nasdaq, giant consulting firm Deloitte, and Singaporean tech firm Anquan.