HSBC’s Singapore branch, together with the Singapore Stock Exchange (SGX) and investment firm Temasek, are exploring blockchain opportunities to improve bond market performance.
Financial institutions are testing the benefits of distributed ledger technology for issuing and servicing fixed income securities, taking into account the characteristics of Asian bond markets.
HSBC noted that bond markets in Asia are growing rapidly, but their effectiveness is poor since there is no single platform for issuing securities and exchanging data between different organizations.
As part of the testing, it is planned to launch a private decentralized network for tokenizing bonds using smart contracts. This should significantly speed up the process, reduce errors and reduce costs for all parties involved.
However, Tony Cripps, CEO of the Singapore branch of HSBC Bank, stressed that it is not yet known whether using the blockchain will bring any benefits.
“Only with the joint work of all market participants will we be able to fully understand its actual viability,” he said.
Recall that in September HSBC announced the completion of the first transaction of a letter of credit in RMB on the Voltron blockchain platform.
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