One of the first banks in the world to adopt DeFi protocols to transact foreign exchange and government securities

DBS today announced that it has taken another step in reimagining the future of financial markets. It is one of the first banks in the world to test currency and government securities trading using authorized DeFi liquidity pools on a public blockchain through Project Guardian.

The transaction included the outright purchase and sale of Singapore Government Securities (SGS), Singapore Dollars (SGD), Japanese Government Bonds and Japanese Yen (JPY).

Han Kwee Juan, Head of Group Strategy and Planning, DBS, said this is an important first step towards creating pools of global institutional liquidity that enable increased trading speed, greater transparency, increased efficiency, reduced settlement risk and economies of scale.

“This test transaction demonstrated that by harnessing the power of blockchain, the standards by which financial institutions currently transact with each other can be transformed and redesigned for greater efficiency and transparency. The ability to program smart contracts will reshape the how execution can be achieved in a highly reliable manner, particularly if it takes place in a licensed market where all anonymous wallets are verified by trusted anchors performing “know your customer” processes and trading is allowed to take place in this pool, providing a springboard for the industry to new opportunities in the world of commerce.

Han added that Project Guardian has shown that trading in a permissioned DeFi protocol enables instant (atomic) trading, settlement, clearing and custody, all at the same time. This could transform current trading processes, as trading in a permitted DeFi protocol achieves greater efficiency by reducing friction and minimizing risk. The success of this test transaction also indicates the potential for creating deeper secondary liquidity across multiple assets and financial markets.

“A highly liquid market attracts more investors and achieves efficiencies by bypassing intermediaries. Currently, currencies and government securities are mostly traded in over-the-counter markets involving multiple intermediaries, which leads to friction in the settlement process.

Singapore is the third largest foreign exchange center in the world. Singapore’s average daily FX trading volume reached USD 929 billion in April 2022, up 45% from April 2019. DBS, one of the largest regional market players in Asia, continues to expand its business Treasury and Markets (T&M). The T&M business has seen meteoric revenue growth in recent years, growing from SGD 2.2 billion in 2019 to SGD 3.2 billion in 2021, an increase of over 46%. The company’s five-year (2017-2021) revenue CAGR of 13% is also nearly double the industry average of 6%.

DBS’s T&M business also achieved industry firsts, including a SGD 15 million digital bond paving the way for more security token offerings and facilitating a new path for issuers, investors and dealer banks to interact digitally on a transparent platform.

About DBS
DBS is a leading financial services group in Asia, present in 18 markets. Headquartered and listed in Singapore, DBS is present in all three major Asian growth areas: Greater China, Southeast Asia and South Asia. The bank’s “AA-” and “Aa1” credit ratings are among the highest in the world.
Recognized for its global leadership, DBS has been named “The best bank in the worldby GlobalFinance, “The best bank in the worldby Euromoney andWorld Bank of the Yearby The Banker. The bank is at the forefront of using digital technology to shape the future of banking, having been named “The best digital bank in the world” by Euromoney and the world “The most innovative in digital bankingby The Banker. In addition, DBS was granted the “Asia’s Safest Bankawarded by Global Finance for 14 consecutive years from 2009 to 2022.
DBS offers a full range of services in the area of ​​personal, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with its customers because it does its banking the Asian way. Through the DBS Foundation, the bank creates an impact beyond the bank by supporting social enterprises: enterprises with a double profit and social and/or environmental impact. The DBS Foundation also gives back to society in a variety of ways, including equipping communities with future-ready skills and building food resilience.
With its extensive network of operations in Asia and a focus on engaging and empowering its people, DBS presents exciting career opportunities. For more information, please visitwww.dbs.com.


Source link