Malaysia’s National Stock Exchange Conducts Blockchain PoC to Digitize Bond Market
Malaysia’s national stock exchange, Bursa Malaysia, will conduct a blockchain Proof-of-Concept (POC) called “Project Harbour” to investigate the DLT management of the country’s bonds market. Project Harbour is an initiative that will leverage distributed ledger technology (DLT) to digitize and develop Malaysia’s offshore bonds market—the Labuan Financial Exchange (LFX), a wholly-owned subsidiary of Bursa Malaysia. According to the declaration on July 30, Malaysia’s national stock exchange will associate with Singaporean fintech firm Hashstacs who will develop the blockchain infrastructure to digitize the LFX bonds market.
Malaysia First Movers
Project Harbour attempts to explore DLT and the tokenization of bond assets. By developing a blockchain-based infrastructure—the purpose is to offer a single shared distributed database to be leveraged by Bursa Malaysia and partaking banks of the project. According to the announcement, the initiative intends to enhance the overall effectiveness of Malaysia’s digital bonds market by producing a register of ownership as well as decrease counterparty risks and reconciliation costs. The platform will also utilize smart contracts to automate the movement of funds and securities and improve asset management and liquidity for market participants.
Mr. Benjamin Soh, Managing Director of Hashstacs, said in a statement,” The creation of an industry-wide ecosystem will allow for a complete solution in the origination, servicing, trading, clearing, and settlement, allowing Malaysia to potentially have the first-mover advantage in attracting regional and international bond listings.”
Bursa Malaysia will leverage Hashstac’s blockchain infrastructure, the Securities Commission of Malaysia, Labuan Financial Services Authority, and others, including China Construction Bank and CIMB Investment. Datuk Muhamad Umar Swift, Chief Executive Officer of Bursa Malaysia, said in a statement, “The PoC aims to increase operational efficiency, drive down the cost of operations, and the cost of issuing bonds. We will continue to tap into emerging technological innovations to further develop the marketplace and improve the effectiveness and accessibility of the Exchange.”
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