Singapore Exchange Disburses $300mln Digital Bond Utilizing Blockchain Platform

Singapore Exchange (SGX), an investment holding company provides services related to securities and derivatives trading, has successfully completed the issuance of first digital bond using a blockchain technology powered platform.

On September 1, SGX installed its digital asset disbursement platform to carry out a S$400 million ($294 million), 5.50 year public bond issuance for top local food and agriculture business firm Olam International.

Aimed at Asia bond markets, the latest digital bond was distributed through cooperation with SGX conventional blockchain associates such as HSBC Singapore and investment company Temasek.

Under the joint collaboration, HSBC offered its on-chain payment tool facilitating real-time settlement in numerous currencies to administer payoff between the arranger, issuer and investor custodian.

To disburse the bond, SGX installed DAML, a top smart contract language created by the US blockchain startup Digital Asset. As smart contracts are used by the digital asset disbursement platform of SGX, DAML facilitated the firm to structure the bond and distribution method over the lifecycle of the bond.

Smart contracts allow the platform to gain control over the rights and obligations of partakers taking part in disbursement and asset servicing, including depositary agents, arrangers, custodians and legal counsel.

As per SGX, the recent trial of the latest blockchain powered platform showed huge capabilities such as removal of settlement risks and trimming of settlement time from five to two days.

The latest bond trial has begun after SGX collaborated with HSBC Singapore and Temasek to study the utilization of DLT for bond disbursement in November 2019.

Several enterprises across the globe are taking measures to adopt blockchain technology to realize added advantages in international bond market.

In July 2020, the Philippine Bureau of Treasuru rolled out a blockchain app for disbursing government backed treasury bonds. Executives in South Korea and Thailand are also studying the added advantages of blockchain in the bond market.