The Malaysian bond market is one of the most developed and dynamic according to CBonds. The exponential growth of corporate bonds means the country’s bond market is one of the largest in the region.
Given its significance, Project Harbour is an initiative by Malaysia’s stock exchange to explore Distributed Ledger Technology (DLT). The immediate task will be to create a register for Labuan Financial Exchange’s (LFX)–a bond marketplace, and a subsidiary of Malaysia’s stock exchange (Bursa Malaysia).
It will be a proof-of-concept whose success will create a single source of truth and a reference for participating entities including banks as MalayMail reports on July 29, 2020.
Bursa Malaysia Harnessing Blockchain’s Potential
Datuk Muhamad Umar Swift, the CEO of Bursa Malaysia, said the project is primarily aimed to harness the potential of blockchain and to explore asset tokenization.
In his words,
“The POC aims to increase operational efficiency, driving down the cost of operations as well as the cost of issuing bonds. We will continue to tap into emerging technological innovations to further develop the marketplace and improve the effectiveness and accessibility of the exchange.”
Collaboration with Hashstacs
For the actualization, the team will collaborate with Hashstacs, a fintech development firm from Singapore.
They describe themselves as builders of software that connect blockchain with finance. Their specialty includes post-trade settlements, Asset Management, Custody Management, and Digital Identity and Financial Inclusion.
Hashstacs’ Trident Platform will be used for testing and management of tokenized bonds. Bursa Malaysia, Securities Commission of Malaysia, and several local banks will be the first users. Hashstacs will concurrently build a blockchain solution for issuing, serving, trading, and clearing bonds within the platform.
Benjamin Soh, the Managing Director of Hashstacs said,
“The creation of an industry-wide ecosystem will allow for a complete solution in the origination, servicing, trading, clearing, and settlement, allowing Malaysia to potentially have the first-mover advantage in attracting regional and international bond listings.”
In April, BTCManager reported MoneyMatch’s partnership with Ripple subsequently expanding RippleNet’s services to over 120 countries.