DBS announced that it is testing the trading of foreign exchange and government securities using permissioned DeFi liquidity pools on public blockchain as part of Monetary Authority of Singapore’s (MAS) Project Guardian.
The trade involved the outright purchase and sale of tokenised Singapore Government Securities, Singapore Dollar (SGD), Japanese Government Bonds and Japanese Yen (JPY).
DBS says that Project Guardian showed that trading in a permissioned DeFi protocol enables instant trading, settlement, clearing and custody – all at the same time.
The test trade’s success also indicates the potential for deeper secondary liquidity across multiple assets and markets to attract more investors and bypass intermediaries for greater efficiency.
Separately, DBS is also conducting a trial in collaboration with GovTech involving the use of tokenised digital SGD vouchers at the Singapore Fintech Festival 2022.
“The ability to programme smart contracts will reshape how execution can be achieved in a highly trusted manner, especially if it takes place in a permissioned market where all anonymous wallets are verified by trust anchors performing ‘Know Your Customer’ processes and trading is allowed to take place within that pool,”
said Han Kwee Juan, Group Head of Strategy and Planning, DBS.
