The singapore Exchange (SGX) together with the country’s top financial regulator, the Monetary Authority of Singapore (MAS) have succesfully developed a blockchain-based delivery versus payment (DvP) system for settlement of tokenized assets.
The futuristic DvP system allows for a simultenous swap of assets and the corresponding payment. In other words, all asset sales will receive instant payment upon exchange, more of a cash on delivery system.
The system’s development was commisioned by MAS and SGX and is a collaborative effort between Singaporian Tech giant Anquan, Consulting firm Deloitte, US-based Securities exchange platform Nasdaq.
According to a joint report published by MAS and SGX, the process of assets delivery and payment is powered by blockchain’s smart contracts network. It is through smart contracts that the system is able to process assets’ delivery and payments simultanously across multiple blockchain networks.
With the new blockchain-based DvP system, the SGX will be able to conduct a seamless settlement process with limited risks involved. Besides efficiency and security in the process of settlement, the blockchain-based DvP will shorten the time taken to complete the process.
The report realeased on November 11 , reveals that the DvP system leverages on smart contracts to facilitate the automation of the settement process.
According to Tinku Gupta, SGX’s Chief of Technology, the team has already applied to be granted the proprietary rights for the invention.
“Based on the unique methodology that SGX developed to enable real-world interoperability of platforms, as well as the simultaneous exchange of digital tokens and securities, we have applied for our first-ever technology patent.”
The Ubin program
The new DvP system is in line with Singapore’s blockchain initiative Ubin. Ubin is Singapore’s Central Bank program that seeks to create applications of Distributed ledger technology (DLT) in settlement of payments and securities.
The recently unveiled DvP system developed in the second phase of the Ubin Program utilizes open-source softwares developed in the first phase of the project.
Singapore’s government together with local tech companies like their Chinese counterparts are actively researching on multiple applications of blockchain technology to better service delivery across different economy sectors.