The Delivery versus Payment (DvP) process, which summarizes the trading of assets in exchange for payments, usually takes 3 days to complete from the transaction date.
The Singapore Exchange (SGX) and the Monetary Authority of Singapore (MAS) announced the successful implementation of the DvP capabilities when trading tokenized assets.
The system is designed to facilitate the settlement of tokens in different platforms, with the aim to shorten settlement cycles and simplify post-trade processes.
According to Sopnendu Mohanty, MAS Chief Fintech Officer, the project shows the value of the blockchain and the benefit it adds to the financial market. He also stated that Singapore Banks are catching up on FinTech developments and are actively working towards becoming a global FinTech hub.
The first successful DvP prototypes come as a result of a successful partnership between Nasdaq, Deloitte, and Anquan. These prototypes demonstrate that corporate investors and financial institutions can exchange security assets and tokenized digital currencies on different platforms by running simultaneous operations.
Furthermore, the prototypes prove the ability to operate simultaneous activities while reducing settlement risks and improving operational efficiency.
The partnership also confirms that investor protection, interledger interoperability, and DVP settlement finality are achievable by using specific solutions designed and developed on the blockchain.
As published in an industrial report, SGX and MAS have jointly explained how the automation of DvP settlement processes using Smart contracts would boost the industry.
The report also reveals key operational and technological considerations in ensuring resilient operations. Furthermore, it defines the market framework governing post-trade settlement processes.
Mohanty explained that the asset tokenization concept and other lessons learned from the project are applicable to the broad economic spectrum, creating various new opportunities.
The announcement comes only days before the launch of the third edition of the Singapore FinTech Festival.
This weeklong event will host around 450 exhibitors, 250 speakers, and nearly 4000 exhibitors, connecting various FinTech professionals and businesses from across the world.