Global banks test DeFi protocols for FX and Government bond transactions
Under the pilot, DBS Bank, JPMorgan and SBI Digital Asset Holdings conducted foreign exchange and government bond transactions against liquidity pools comprising of tokenised Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (JPY) and Singapore Dollar (SGD). A live cross-currency transaction with real-world assets was conducted as an isolated exercise using tokenised JPY and SGD deposits, alongside a simulated test involving the buying and selling of tokenised government bonds.
MAS says the pilots demonstrate the capability for institutions to trade, clear and settle trades instantaneously among themselves without the need for clearing and settlement intermediaries.Moving forward, the central bank is launching two new industry pilots - on trade finance with Standard Chartered and in wealth management with HSBC and UOB. Sopnendu Mohanty, chief fintech officer, MAS, says: “The live pilots led by industry participants demonstrate that with the appropriate guardrails in place, digital assets and decentralised finance have the potential to transform capital markets.
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