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DBS Bank, a prominent Asian financial services corporation, is using decentralized finance (DeFi) for a program organized by Singapore's central bank. According to a Nov. 2 press release from the company, DBS has begun a trading experiment of state securities and foreign exchange (FX) utilizing authorized DeFi liquidity pools.
DBS To Employ DeFi Protocol
Project Guardian, a cross-industry cooperative initiative led by the Monetary Authority of Singapore (MAS), is responsible for the creation. The exchange, which took place on a public blockchain, featured the buying and selling of Singapore dollars (SGD), tokenized Singapore government securities (SGS), Japanese government bonds, and Japanese yen (JPY). The research has demonstrated that trading using a confidential DeFi protocol allows immediate trading, settlement, clearing, and custody processes to run concurrently. According to DBS, the effort might change the way that trading is done by improving liquidity across a diversity of financial assets and marketplaces.
FX and State Securities - Most Traded Markets
Han Kwee Juan, director of the strategy at DBS, claims that the most recent Project Guardian advancements establish the groundwork for the formation of international institutional liquidity pools that would promote speedier trading, more transparency, fewer settlement risks, and other advantages. Han stated that smart contracts have great potential for trading implementation and validation. Han also argued that a market with high liquidity draws more investors and increases efficiency by avoiding mediators. The settlement procedure is slowed by the fact that FX and government securities are currently mostly traded in over-the-counter markets, where there are several intermediaries.
DBS Bank Employed Smart Contract Technology
Recently, a Singaporean government software company named Open Government Products (OGP) and the Singapore-based financial services corporation DBS collaborated to produce a live trial for purpose-bound money-based (PBM) vouchers issuance. DSGD-issued by DBS and blockchain-based PBM vouchers will be produced using smart contract functionality enabled by OGP. Because of this, issuers can independently organize the distribution and administration of vouchers to specific beneficiaries.