UBS, SBI and DBS complete cross-border repo on public blockchain
15 November 2023 Japan, Singapore, Switzerland
Image: SnowElf/stock.adobe.com
UBS, SBI and DBS have launched the ‘world’s first’ live repo transaction with a natively-issued digital bond on a public blockchain.
The transaction settled a repo, digital bond purchase and redemption using regulated digital payment tokens across entities in Japan, Singapore and Switzerland.
It was conducted as part of MAS’ Project Guardian — a collaborative initiative with policymakers and the financial industry that aims to test the feasibility of applications in asset tokenisation and decentralised finance, while managing risks to financial stability and integrity.
According to the three firms, the transaction highlights how blockchain technology enables cross-border distribution and settlement of capital market instruments in a “highly efficient, flexible and cost-effective manner”, while enhancing liquidity management.
A number of benefits have been showcased through this event, the firms say, including real-time 24/7 settlement, operational and capital efficiency, all the while ensuring compliance and security requirements.
The transaction involved a repo to borrow tokenised Japanese Yen (JPY) against a JPY-denominated natively-issued digital bond, with the borrowed tokenised JPY used to finance the purchase of the same bond.
The subsequent digital bond redemption and payment of principal and interest at maturity was executed on-chain, demonstrating the potential to cover an entire transaction lifecycle on a public blockchain.
Commenting on the milestone, Mike Dargan, UBS Group chief operations and technology officer, says: “With this pioneering transaction, we proved the feasibility of executing a fully automated and instantly settled transaction across several jurisdictions by leveraging a public distributed ledger technology (DLT) network under a strict compliance framework.
“The flexible nature of our UBS Tokenize service allowed our partners to easily adapt and leverage our innovative product framework and technology capabilities to their infrastructure and transaction needs.”
Fernando Luis Vázquez Cao, SBI Digital Asset Holdings CEO, adds: “At SBI Digital Asset Holdings (SBI DAH), we are building an institutional grade digital asset ecosystem and are ready for its commercialisation.
“This transaction demonstrates what can be done in Japan and cross-border, in providing innovative and efficient products and services to the market and clients. It is also an example of the strength of partnerships SBI DAH has with large global institutions and across the SBI group, with SBI Securities as counterparty to the repo transaction and Shinsei Trust & Banking as the issuer of JPY stablecoin.”
The transaction settled a repo, digital bond purchase and redemption using regulated digital payment tokens across entities in Japan, Singapore and Switzerland.
It was conducted as part of MAS’ Project Guardian — a collaborative initiative with policymakers and the financial industry that aims to test the feasibility of applications in asset tokenisation and decentralised finance, while managing risks to financial stability and integrity.
According to the three firms, the transaction highlights how blockchain technology enables cross-border distribution and settlement of capital market instruments in a “highly efficient, flexible and cost-effective manner”, while enhancing liquidity management.
A number of benefits have been showcased through this event, the firms say, including real-time 24/7 settlement, operational and capital efficiency, all the while ensuring compliance and security requirements.
The transaction involved a repo to borrow tokenised Japanese Yen (JPY) against a JPY-denominated natively-issued digital bond, with the borrowed tokenised JPY used to finance the purchase of the same bond.
The subsequent digital bond redemption and payment of principal and interest at maturity was executed on-chain, demonstrating the potential to cover an entire transaction lifecycle on a public blockchain.
Commenting on the milestone, Mike Dargan, UBS Group chief operations and technology officer, says: “With this pioneering transaction, we proved the feasibility of executing a fully automated and instantly settled transaction across several jurisdictions by leveraging a public distributed ledger technology (DLT) network under a strict compliance framework.
“The flexible nature of our UBS Tokenize service allowed our partners to easily adapt and leverage our innovative product framework and technology capabilities to their infrastructure and transaction needs.”
Fernando Luis Vázquez Cao, SBI Digital Asset Holdings CEO, adds: “At SBI Digital Asset Holdings (SBI DAH), we are building an institutional grade digital asset ecosystem and are ready for its commercialisation.
“This transaction demonstrates what can be done in Japan and cross-border, in providing innovative and efficient products and services to the market and clients. It is also an example of the strength of partnerships SBI DAH has with large global institutions and across the SBI group, with SBI Securities as counterparty to the repo transaction and Shinsei Trust & Banking as the issuer of JPY stablecoin.”
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