Capital markets News

Bursa Malaysia explores blockchain for stock certificates with VMware, Digital Asset

stock market trading

Today, Bursa Malaysia Berhad announced that the stock exchange is developing a proof of concept (PoC) to use blockchain to record stock certificates. For the PoC, it partnered with Digital Asset for its Daml smart contracts language and VMware for blockchain. Structured warrants are the initial focus of the trials.

“The dematerialisation of Structured Warrants through a robust and automated distributed ledger technology will contribute to a more transparent, secure, economical, and most importantly, effective marketplace for all,” said Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia. 

Currently, the certificates are paper-based, resulting in manual processes and the need to physically transport them, which is not ideal during a pandemic. Blockchain will address these issues and provide the transparency enabled by a centralized repository.

Other participants in the initial phase include Macquarie Capital Securities (Malaysia) and Maybank Investment Bank, which plan to test electronic term sheets. Electronic scrip registration and recording will also be trialed.

Meanwhile, Labuan International Financial Exchange (LFX), a Bursa Malaysia subsidiary, is involved in blockchain project for bond issuance.

Digital Asset is working with several stock exchanges, including the Australian Securities Exchange (ASX), HKEX and SGX. And it has integrated Daml with the Nasdaq Marketplace Services Platform.