DBS explored blockchain DeFi technologies for forex and bond trades
The bank is at the core of initiatives led by the Monetary Authority of Singapore to investigate blockchain-based digital financial technology.
Singapore’s DBS Bank, the biggest financial institution in Southeast Asia has become one of the first institutions to test the trading of foreign currency and government securities on a public blockchain utilizing permissioned decentralized finance (DeFi) liquidity pools.
The trades consisted of the purchase and sale of tokenized Singapore government securities, the Singapore dollar, Japan government bonds, and the Japanese yen, according to a statement emailed to Forkast by DBS. The transactions were part of the city-Project state’s Guardian, which aims to explore and test financial technology innovations.
Project Guardian, a collaboration between Singapore’s central bank and the financial sector, aims to investigate the viability of applications in asset tokenization and DeFi while mitigating threats to the stability and integrity of the financial system.
The pilot, which is a collaboration between DBS Bank Ltd., JP Morgan, and SBI Digital Asset Holdings, entails the construction of a permission liquidity pool made up of tokenized bonds and deposits.
The move comes at a time when the Monetary Authority of Singapore (MAS), the city-central state’s bank, is focused on becoming Asia’s top technology-driven financial hub, adopting blockchain and central bank digital currency.