The joint venture capitalizes on DX trends shaping global capital markets and will advance the development of capital markets infrastructure here.
In August 2020, three entities in Singapore—SGX, Temasek and HSBC—had collaborated to issue Asia’s first public syndicated digital bond for Olam International. In all, SGX’s digital asset issuance, depository and servicing platform was used to issue four digital bonds by several issuers, with a total size of over S$1 billion.
Now, SGX and Temasek have announced that they have entered into a joint venture (JV) that is set to be the Asia Pacific region’s first exchange-led digital asset venture focused on capital markets workflows.
The JV will involve smart contracts, ledger and tokenization technologies, and combines both firms’ respective strengths in operating market infrastructure and expertise in blockchain technology and ecosystem connectivity, respectively.
Partnering with fixed income issuance platforms, the alliance will offer post-trade and asset servicing infrastructure—providing issuers, arranger banks, lawyers, investors and paying agents with a comprehensive, issuance-to-settlement network for Asia bonds. Concurrently, the JV will focus on other existing and emerging asset classes that have seen growing market demand, including funds and sustainable finance.
SGX’s Senior Managing Director, Head of Fixed Income, Currencies and Commodities (FICC) Lee Beng Hong said: “The early success in our digital bond issuance platform has paved the way for us 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. Together, we will capitalize on digitalization trends that continue to shape global capital markets, and advance the development of capital markets infrastructure in Asia.”
Blockchain@Temasek’s Managing Director Pradyumna Agrawal added: “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. 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.”