Singapore Stock Exchange Taps Blockchain for Settlement Layer Infrastructure

The Singapore Stock Exchange (SGX) has partnered with investment firm Temasek to explore the use of blockchain technology for the settling of asset trades. Temasek remains a prominent player in Singapore’s expanding utilization of decentralized ledger technology (DLT) with several collaborations with both public and private establishments in the city-state.

SGX and Temasek to Build Blockchain Settlement System

According to a Nikkei Asia report on Friday (Jan. 22, 2021), Temasek and SGX have announced a joint venture collaboration to utilize blockchain for finance purposes. As part of the partnerships, the two companies will create a JV company that will examine ways in which to leverage DLT for issuing and settling trades of SGX-listed assets including bonds and equities.

Commenting on the partnership, Lee Beng Hon, the SGX currencies, income, and commodities chief, remarked:

“We are very excited to take our digital asset business to the next level in partnership with Temasek. Together (with Temasek), we will capitalise on digitalisation trends that continue to shape global capital markets, and advance the development of capital markets infrastructure in Asia.”

For Temasek managing director Pradyumna Agrawal, the company is pleased to once again be partnering with SGX adding: “We have been tracking the evolution of financial market systems and the opportunities for the development of digital infrastructure that will transform how financial transactions are conducted.”

The move extends SGX’s blockchain participation. As previously reported by BTCManager, the stock exchange partnered with the Monetary Authority of Singapore (MAS) back in November 2018 to create a blockchain-based settlement infrastructure for tokenized assets.

In August 2020, SGX also collaborated with Temasek and HSBC Holdings to pilot the first-ever public syndicated blockchain bond in Asia. At the time, the partnership issued the digital bond on behalf of Olam, an agro-based business enterprise. SGX also holds a 10 percent stake in the digital asset exchange recently launched by DBS, the largest lender in the whole of Southeast Asia.

SGX’s continued blockchain foray is also representative of the growing DLT utilization in the city-state as well as Southeast Asia as a whole. In December 2020, Singapore’s government even announced plans for a $9 million blockchain investment package. The city-state is also exploring a DLT-based system for bilateral trade with Australia.

This growing focus on DLT and blockchain has also come with authorities moving to formalize the existing legal framework for the burgeoning industry. Earlier in January, the MAS was given the mandate the oversee the operations of cryptocurrency and digital payment providers in Singapore.