SGX, Singapore Exchange, which is a major investment holding company based in Singapore has just issued its first blockchain-based digital bond. This has been announced by SGX recently stating that it has deployed its digital asset insurance platform. The platform will be used to conduct a 5.5-year public bond issuance, worth $294 million for Olam International, which is a major food and agriculture business company based in Singapore only.
SGX implements DAML smart contract language
This new digital bond is focused on the Asia bond markets, which has been made possible through the cooperation of HSBC Singapore and Temasek. For this initiative, HSBC has also provided its on-chain payments solution. This will help to do instant settlements in many different currencies. SGX has also implemented DAML which is a smart contract language to issue the bond. DAML has been developed by Digital Asset which is an American blockchain startup.
The digital asset issuance platform of SGX is based on smart contracts and that is why there is a need for a smart contract language. With the help of smart contracts, the firm is able to capture all the rights and obligations of all the parties that are involved in the issuance.
Latest Pilot demonstrates major efficiencies
SGX has specified that this latest pilot demonstrates some of the major efficiencies reducing the settlement time up to two days. Along with this, it also demonstrates the elimination of settlement risks. This new bond is coming after the firm has formed a partnership with HSBC Singapore and Temasek. The partnership was formed in November 2019 to explore the use of digital ledger technology for bond issuance.
It has been seen that a lot of companies are trying out DLT by implementing it to the bond market. Back in July, the Philippine Bureau of the Treasury had launched a blockchain-based app that helps to distribute the treasury bonds issued by the government.