Singapore Exchange to streamline trading processes with blockchain tech

Following a successful trial of DLT-based bond issues, SGX has formed a dedicated company with investment firm Temasek to extend and expand the use of the tech.

The use of distributed ledger technology can bring efficiencies to many aspects of the lifecycle of financial products, from listing and issuing through to the settlement of trades.

Singapore Exchange, or SGX, has announced a joint venture with investment firm Temasek to use DLT to streamline the issuance and trading of financial products listed on its platform.

According to a Friday report from Nikkei Asia, this will initially consider bonds, funds and sustainable financial products, and it may be extended in the future to cover other asset classes such as equities.

SGX has previously collaborated with Temasek and banking giant HSBC in a trial using blockchain technology to issue fixed-income securities. The first results of this trial came in September 2020, with a $300-million bond issuance for local food and agribusiness company Olam International.

This was followed by a further three fixed-income bonds issued through the system, totalling over 1 billion Singapore dollars ($750 million) in value.

Today’s announcement formalizes the partnership in the creation of a limited company while extending and expanding the range of the previous trial. Lee Beng Hong — SGX’s head of fixed income, currencies and commodities — commented on the venture:

“We are very excited to take our digital asset business to the next level in partnership with Temasek.”