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SGX and MAS Jointly Developed Settlement Platform

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SGX and MAS Jointly Developed Settlement Platform

DvP Platform Developed

In an effort to bring new levels of efficiency to finance, the Monetary Authority of Singapore (MAS), and the Singapore Exchange (SGX), have turned to blockchain.  In a recent report released by the duo, they describe the process in which through the utilization of smart-contracts, they are able to shorten settlement periods on security transactions.  This is known as a Delivery versus Payment (DvP) platform.

Typically, when a transfer of ownership occurs for an asset represented by a security, this trade is followed by a settlement period.  This period typically ranges from 1-2 business days.  The MAS and SGX have shown that through the use of their developed platform, they are able to simultaneously complete the trade and settlement process for digital securities – essentially removing the 1-2 day wait typically seen.

Furthermore, they were able to demonstrate interoperability between various blockchain.  This flexibility, combined with the increase in efficiency and security offered through the process, is a perfect example of how blockchain can be implemented into finance.

The report was made available on November 11, 2018.  This comes roughly 2 months after the announcement of their collaboration on this project was made.

Monetary Authority of Singapore (MAS)

The MAS is the central bank of Singapore.  Their role is to strive for economic growth within the country.  They achieve this through oversight of all financial institutions operations within their borders.

Commenting on the platform developed with the SGX was Chief Fintech Officer of the MAS, Sopnendu Mohanty.  He stated, “Blockchain technology and asset tokenisation are fuelling a new wave of innovation globally. This project has demonstrated the value of blockchain technology and the benefits it can bring to the financial industry in the short to medium term. The concept of asset tokenisation, as well as other learnings gleaned from this project, can potentially be applied to a broad spectrum of the economy, creating a whole new world of opportunities.”

Singapore Exchange (SGX)

The SGX came to fruition in 1999 when the Stock Exchange of Singapore, Securities Clearing and Computer Services, and the Singapore International Monetary Exchange combined into one entity.  In the time since this merger, the SGX has grown to offer services from trading, settlement, custody solutions, and more for the thousands of assets that they support.

Speaking on the newly developed DvP platform was the SGX Head of Technology, Tinku Gupta.  She stated, “We are delighted to drive this important industry effort to accelerate innovation in the marketplace. Based on the unique methodology 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.”

Outside Help

While this DvP platform is the result of the efforts of both the MAS and the SGX, they were not without help during the development process.  In their time creating this platform, the duo was assisted by three entities; These were Nasdaq, Anquan, and Deloitte.  Each of these companies lent their expertise to the project, as it has the potential to aid in a future of finance that is not hindered by borders.

Nasdaq Senior Vice President, Magnus Haglind spoke about their collaboration.  He commented, “In collaborating with SGX and MAS on this unique ecosystem of converging blockchains, we have demonstrated how to create interoperability between multiple networks to secure settlement between different assets – this is a major step in the application of blockchain to the capital markets.”

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Joshua Stoner is a multi-faceted working professional. He has a great interest in the revolutionary 'blockchain' technology. In addition to this, he is a licenced Paramedic in Nova Scotia, Canada. As such, he can provide emergency care/medicine to any situation necessitating it.

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Canadian Companies Involved in Digital Securities

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July 1st represents Canada Day in the Great White North.  As such, we thought that a quick look at a few Canadian companies involved in digital securities would be appropriate today.

To date, Canada has been one of the leading countries surrounding anything blockchain related.  We have seen government adoption, the creation of Ethereum, the first Bitcoin fund listed on a major exchange, and rumblings of a potential central bank digital currency.  The following are a few examples of Canadian based endeavours.

Bank of Canada

The Bank of Canada is one of the few of its kind to release official statements regarding the release of a CBDC.  It has been established that, while there are no immediate plans for the release of a CBDC, the bank fully intends on being prepared for this, eventuality.  This was first made apparent through job postings, such as ‘CBDC Project Manager’, but later through direct commentary.

In recent weeks, the Bank of Canada has gone so far as releasing an ‘analytical note’, which discusses the privacy needs of a potential CBDC.  While they note that the goal is to attain privacy, akin to what cash affords its users, currently technology, such as zero-knowledge proofs, are not appropriate, and that both maturation and national-scale implementation first need to occur.

While it may be years before a Canadian CBDC is actually launched, the Bank of Canada is at least making sure the nation is ready for that day.

Blockstation

Operating out of Toronto, Blockstation is a young company, rife with potential.  The team behind Blockstation has developed a suite of services which leverage blockchain technology.  These services were built to allow “…the traditional financial ecosystem to get in on digital assets, including Bitcoin, Ether, and Tokenized IPOs (Security Token Offerings, or STOs)”

The hard work that went in to establishing these capabilities has not gone unnoticed, as Blockstation has successfully partnered with multiple stock exchanges.  One such pilot will soon see the launch of at least 4 tokenized IPOs on the Jamaica Stock Exchange.

To learn about Blockstation in more detail, make sure to peruse our exclusive interview with CEO, Marko Hafez.

Interview Series – Marko Hafez, CEO of Blockstation

TokenGX

This Canadian outfit has recently received the greenlight by the regulatory body ‘Ontario Securities Commission (OSC)’, for the launch of a secondary marketplace.

Dubbed FreedomX, this anticipated marketplace will be one of the first of its kind in Canada.  It will offer a home for digital securities to actively be traded, providing higher levels of asset liquidity in the process.

Beyond just operating a regulated secondary marketplace, TokenGX is also working to establish, and deploy, a stablecoin.  This will be utilized as the primary means of settlement on FreedomX, and would be tethered to the Canadian Dollar.

Canadian Stablecorp

On the topic of stablecoins, a pair of Canadian Companies (3iQ and Mavennet) have joined forces to create ‘Canada Stablecorp’.

The first release by Canada Stablecorp is known as QCAD.  This is a CAD backed digital asset, which was structured as such for 3 main reasons.

  1. Provide its users with easy access to a digital asset, which can provide a reprieve from market volatility.
  2. Give Canadians a ‘home-grown’ variant; A trait which should appeal to Canadian investors looking to support Canadian companies.
  3. Leveraging the strength, and stability, of CAD. The Canadian dollar is typically accepted on a world stage, and benefits from a nation which typically remains removed from divisive world events.

While QCAD has not established itself to the extent shown by Tether, GUSD, and USDC, the potential is there.

Onwards and Upwards

Unfortunately, not all of the promising companies coming out of Canada could be discussed here today.  Those discussed represent a fraction of the activity taking place in the great white north.

If one thing is clear from this activity, it is that Canada has been/is playing an important role in the forwarding of blockchain and the digital securities sector.

Happy Canada Day!

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Monaco Chooses Tokeny as Sole Provider for Tokenization Services

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Sole Provider

Tokeny Solutions has just announced that they have become the sole provider of tokenization services for Monaco.

While a tiny nation, endorsement and usage from the Government of Monaco is a huge step for Tokeny;  It validates the work they have been doing, and the potential of what they are yet to achieve.

MOU

As it stands, the agreement between Monaco and Tokeny exists as a memorandum of understanding (MOU).  While not a binding contract, the MOU essentially means that formal documents have been signed by each of the parties, indicating their intent to work together.

Commentary

Upon announcing this new development, representatives from each, Tokeny and the Principality of Monaco, took the time to comment.

Luc Falempin, CEO of Tokeny Solutions, stated,

“The lack of high quality tokenized assets has been a stumbling block in the tokenization industry. With the mandatory label, projects selected by the Principality of Monaco will be easily recognized by investors as serious and quality investment opportunities. Then, the rights of investors will be guaranteed by their onchain identity. For the issuer, AML and KYC will be automatically enforced in any transfer.”

Frédéric Genta, Delegate for Digital of affairs Chief Digital Officer of the Principality of Monaco, stated,

“Monaco is moving towards its ambition to become a funding nation for progress with our STO framework. Two key milestones were achieved; a dedicated STO law was voted by the National Council and we are welcoming Tokeny to the Principality to operate our STOs.”

More than Promise

News of this newly established MOU goes beyond just promise, though.  Tokeny has announced that they already have companies lined up, waiting to capitalize on their services and friendly regulations.

The first example of which, is IceBreaker.  This production company hopes to leverage the benefits of hosting an STO, in order to fund and monetize content such as films and exhibits.  IceBreaker is spearheaded by, Acadamy award winning filmmaker, Luc Jacquet.

He commented on plans at IceBreaker, stating,

“IceBreaker intends to leverage blockchain technology to facilitate the financing of meaningful content production while retaining all associated rights enabling new monetization opportunities via films, exhibitions, etc. March of the Penguins and the subsequent Antarctica exhibition have demonstrated that the model can be a profitable one making it appealing to investors while preserving the freedom to express my creativity and promoting the virtuous value of the projects I carry”.

Monaco

With a population of roughly 40,000, and a geographical footprint of just <1sq mile, Monaco holds the title of the second smallest country on Earth.  Despite this, it remains one of the wealthiest nations, as well, with over 30% of the population being millionaires.

Tokeny

Founded in 2017, Tokeny is based out of Luxembourg.  Above all, the team at Tokeny has been working to develop, and spur adoption of, a suite of services tailored towards the digital securities sector.

CEO, Luc Falempin, currently oversees company operations.

Speaking with Luc

If interested in learning more about Tokeny, and what the company has to offer, make sure to peruse our past interview with CEO, Luc Falempin.  In this discussion Luc Falempin touches on his personal discovery of blockchain, and what makes Tokeny special.

Interview Series – Luc Falempin

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Real Estate Increasingly Popular within Digital Securities – Vertalo and Tokensoft each Launch New Platforms

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On The Hunt

Blockchain based endeavours, such as cryptocurrencies, are only now beginning to grasp where they can thrive.  It has taken a decade, but there are finally a crop of ‘killer applications’ being developed.  This is most recently evident through the growth of decentralized finance (DeFi).

Digital securities are a step behind cryptocurrencies, and are still in the searching phase.  With the sector first being distinguished only a few years ago, it is still in its infancy.  In time, will it be tokenized art that catches on? Or maybe it will be supercars?

Multiple companies believe that they have determined the best use case for digital securities, and their accompanying services – Real Estate.

Prime Candidate

There are a variety of reasons which make real estate the perfect asset class to undergo restructuring with digital securities.

  • Traditionally, real estate suffers from low-liquidity
  • High fees and various ‘middlemen’
  • Restrictive access

While each of these issues may not stand out as being blatantly detrimental, they most certainly hold back the potential of an industry, ripe for change.

Through the use and implementation of digital securities, each of these points can be addressed.  In doing so, opportunities will arise where there were none before; All the while, giving more people access to a newly liquid asset class.

To learn more about why digital securities and real estate are a perfect fit, check out Vertalo’s FAQ on the subject HERE.

The Players

In the past week, we have seen two big announcements surrounding digital securities and real estate.  These have come from a pair of U.S. based companies, each quickly becoming leaders within their space – Austin based, Vertalo, and San Francisco based, TokenSoft.

Vertalo Real Estate

An influx of digital securities into real estate has shown enough promise, that Vertalo has just formed/launched an entire new branch of their company named Vertalo Real Estate (VRE).

In order to hit the ground running, Vertalo hired the full team at Advantage Blockchain.  With this experienced team spearheading the new endeavour, there will, surely, be new and positive developments announced in the coming months.

Among the talent coming on board from Advantage is RECM President, Gary Brandeis.  In this new position Brandeis will operate as the President of Vertalo Real Estate.

This new branch is described as being “focused on transforming ownership structures for the commercial real estate market…throughout the United States.”

While initial focus may remain on commercial opportunities, the end goal is to expand into real estate opportunities of all sizes.

Dave Hendricks, CEO of Vertalo, states,

“…the hiring of the Advantage Blockchain team reflects the dramatic increase in interest from commercial real estate owners for increased efficiency and secondary liquidity.  Vertalo has always considered commercial real estate – and eventually residential portfolios of all sizes – to be an ideal target market for digital transformation.”

TokenSoft Real Estate

Much like Vertalo, the merits of digital securities merging with real estate has not escaped the attention of TokenSoft.  This young company has just announced the launch of a ‘private label marketplace for real estate’.

The purpose of this new platform is a simple, but lofty, goal – enable secondary sales of real estate based private equity.  Beyond secondary sales, Tokensoft offers a full suite of services made possible through partnerships with companies, such as Signature Bank and Inveniam Capital Partners

Mason Borda, CEO of Tokensoft, states,

“Real estate investments like these are traditionally illiquid for several years. Leveraging a combination of regulatory automation by use of the blockchain, we’ve been able to bring a much needed liquidity solution to market.”

In Other News

To learn more about why such importance is placed on liquidity, make sure to peruse Borys Pikalov’s thoughts in the following article.

Solving the Liquidity Puzzle for Security Tokens

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