Singapore Exchange (SGX) and Temasek have teamed up to launch a joint venture that aims to enhance digital asset infrastructure through the use of blockchain or distributed ledger technology (DLT).
SGX’s management stated that the joint project aims to be the Asia Pacific or APAC region’s first exchange-managed digital asset venture that’s focused on improving capital markets workflows through DLT-enabled smart contracts, and related tokenization technologies.
Through the partnership, the SGX and Temasek intend to combine SGX’s multi-asset experience in managing and operating market infrastructure with Temasek’s expertise in blockchain or DLT and related ecosystem connectivity.
The joint venture between the companies will focus on working with fixed income issuance platforms in order to connect to its post-trade and asset servicing infrastructure. This should offer issuers, arranger banks, legal experts, investors and various paying agents a complete, issuance-to-settlement network for handling Asian bonds.
Additionally, the partnership between SGX and Temasek will focus on other emerging asset classes that have seen increasing market demand, such as specialized or dedicated funds and sustainable finance initiatives.
This joint venture aims to further extend the ongoing collaboration between SGX, Temasek and HSBC which led to the issuance of their first public syndicated digital bond for Olam International back in August 2020. SGX’s digital asset issuance, depository and servicing platform has reportedly been leveraged to issue four different digital bonds by various issuers, with a total size of more than S$1 billion (appr. $754 million).
Lee Beng Hong, Senior MD, Head of Fixed Income, Currencies and Commodities (FICC), SGX remarked:
“The early success in our digital bond issuance platform has paved the way for SGX to make a larger move into digital assets, and we are very excited to take our digital asset business to the next level in partnership with Temasek.”
He added:
“Together, we will capitalize on digitalization trends that continue to shape global capital markets, and advance the development of capital markets infrastructure in Asia.”
Pradyumna Agrawal, MD – Blockchain, Temasek, stated:
“We have been tracking the evolution of financial market systems and the opportunities for development of digital infrastructure that will transform how financial transactions are conducted.”
He continued:
“We are pleased to partner SGX in this effort towards continual improvement of capital markets through the development of innovative end-to-end digital asset solutions.”