The Singapore Exchange (SGX) and state-backed investment fund Temasek announced the creation of a joint venture to address the digital assets space. The solution will leverage blockchain, tokenization and smart contracts for workflows, initially addressing the high friction bond market sector. Funds and emerging asset classes such as sustainable finance are also on the cards.
The platform is already far advanced and was used in August last year to issue a S$400 million ($301m) bond for agribusiness Olam with HSBC providing on-chain settlement. This was one of four issuances that have totaled more than S$1 billion ($753m).
“Together, we will capitalise on digitalisation trends that continue to shape global capital markets, and advance the development of capital markets infrastructure in Asia,” said Lee Beng Hong, Senior Managing Director, SGX.
While many digital asset platforms aim to be end-to-end, it’s notable that this one seeks to partner with fixed income issuance platforms that can leverage SGX’s post-trade and asset servicing infrastructure. That seems like a smart strategy because it has the potential to create a larger ecosystem.
Both companies are investors in another Asian focused digital asset platform, iSTOX, which yesterday announced backing from Japanese government-backed firms. The Stock Exchange of Thailand is planning to launch a digital assets platform in the second half of 2021.
Temasek has quite a few other blockchain interests. It is a participant in the JP Morgan – DBS Bank venture to provide a wholesale multi-currency payments infrastructure in Singapore using JPM Coin technology. It’s also a member of Diem, formerly Libra and has other investments, such as in digital identity startup Affinidi.