An innovation fund has helped two firms to facilitate rapid smart contracts issuances, digital asset interoperability and end-to-end bond lifecycle management.
Using distributed ledger technology to tokenize securities in the securities market is getting one step closer to commercial reality.
Teams from a global bank and a fintech firm in Singapore have worked on digital assets interoperability across platforms and have come up with a proof of concept for what they call a “bond in a box”.
Using Financial Sector Technology and Innovation (FSTI) scheme grants from the Monetary Authority of Singapore, Deutsche Bank Securities Services and fintech Hashstacs Pte Ltd (STACS) have developed a workable DLT platform that facilitates end-to-end bonds lifecycle management.
The proof-of-concept (POC) results were subsequently tested with industry participants: UBS, Malaysia National Stock Exchange Bursa Malaysia, and Union Bank of the Philippines (UnionBank) to obtain more holistic assessments.
Through their collaboration, Deutsche Bank and STACS were able to unlock new efficiencies with rapid smart contracts issuances, test integration with payment modes like UBIN and Diem (Libra), digital custody and asset servicing; and Environmental, Social, and Governance (ESG) financing transparency needs.
According to Deutsche Bank’s Asia Pacific Head of Securities Services, Anand Rengarajan: “With innovation at the forefront of our strategy, it is important to us to actively contribute to, and participate in the future of capital markets from a post-trade servicing perspective. This POC allowed us to assess the practical handling of tokenized assets, as well as the opportunities and challenges that could arise from their commercialization in Singapore, and potentially in other markets.”
STACS’ Managing Director Benjamin Soh noted: “We are excited to have taken the first step towards turning a POC to a proof-of-commercialization. In addition, with the world’s focus turning towards ESG and sustainability, we look forward to expanding our network’s efforts in the sustainability push of the next few decades, via DLT technology as the common technology infrastructural nexus.”