Bursa's blockchain initiative to boost Labuan bond market

By NST Business - December 3, 2020 @ 11:04am

KUALA LUMPUR: Busa Malaysia has announced the successful completion of the bond on blockchain proof-of-concept (POC) with Singapore's financial technology provider Pte Ltd (STACS).

In a statement today, Bursa said the POC was designed to facilitate the growth of the bond marketplace at the Labuan Financial Exchange (LFX) by harnessing the opportunities afforded by blockchain technology and tokenisation of assets. 

It said the POC was executed via three different methodologies which were "Industry Driven", "Lean-Agile" and "Technology Interaction".

"The POC successfully demonstrated that digital bonds could be issued and managed on a blockchain and its attributes of a single source of truth, smart contracts and automation allow for new service expansion offerings," Bursa said.

Bursa chief executive officer Datuk MuhamadUmar Swift said the partnership with STACS, industry participants and regulators demonstrated that blockchain technology can deliver increased efficiencies, transparency and trust that can benefit the bond market. 

"These are key values that ensure we remain responsible for our efforts to develop a vibrant and attractive marketplace," he said.

STACS managing director Benjamin Soh said while there had been plenty of experimentation in this space, successful collaboration between multiple participants have been far and few between. 

"Given our experience in capital markets technology, we are delighted to work with Bursa Malaysia, a national stock exchange with innovation at its core, demonstrating its commitment and leadership to the advancement of new technology through this partnership. 

"Together, we were able to bring together the collective effort of multiple industry practitioners, forward-thinking regulators and technologically advanced partners to explore utilities for the industry," he said.