SGX – Singapore Exchange, the major investment holding firm operating within Singapore, has issued its primary digital bond powered by blockchain.
In line with a recent official announcement, SGX deployed its virtual asset issuance platform to conduct a 400 Mln Singapore dollar [around $294 Mln] 5.5-year public bond issuance for leading native food & agribusiness firm, Olam International.
Focused on Asia bond markets, the new digital bond was permitted by cooperation with SGX’s established blockchain partners like HSBC Singapore & investment company Temasek. As a part of the joint initiative, HSBC provided its on-chain payments solution permitting instant settlement in several currencies to handle proceeds between the issuer, arranger, and investor custodian.
In order to issue the bond, SGX implemented DAML, a renowned smart contact language developed by American blockchain startup Digital Asset.
As SGX’s digital asset issuance platform is based on smart contracts, DAML enabled the firm to model the bond & its distributed workflows for issuance and asset servicing over the bond’s lifecycle. Smart contracts permit the platform to capture the rights and obligations of parties involved in issuance and asset servicing, along with arrangers, depository agents, legal counsel as well as custodians.
In line with SGX, the newest pilot of the new blockchain-enabled platform demonstrated major efficiencies just like the elimination of settlement risks and reduction of settlement time from 5 to 2 days.
The new bond pilot comes after SGX collaborated with HSBC Singapore and Temasek to explore the utilization of DLT for bond issuance earlier in the month of November last year.
Several firms around the world are already trying to implement blockchain technology to bring more benefits to the worldwide bond market. Earlier in July this year, the Philippine Bureau of the Treasury launched a blockchain app for distributing government-issued treasury bonds. Authorities in South Korea and Thailand also exploring the potential benefits of blockchain within the bond market.