Please try another search
Economy14 hours ago (Jun 24, 2021 01:10AM ET)
© Reuters. The financial district is seen shrouded by haze in Singapore September 18, 2019. REUTERS/Feline Lim/Files
By Alun John
HONG KONG (Reuters) – Asian financial regulators should do more to support large-scale trials of “tokenised securities”, an industry body said on Thursday, since banks and technology firms’ current experiments are stuck in different silos, hindering the pace of change.
Tokenised securities are products like shares and bonds whose proof of ownership is recorded on a distributed ledger, the technology that underpins other digital tokens such as bitcoin.
Many banks are exploring the concept, hoping it will help them price and settle transactions more efficiently.
But trials so far involve “three or four firms working together on proofs of concept which are not interoperable”, said Laurence Van der Loo, executive director for technology and operations at financial industry body the Asia Securities Industry and Financial Markets Association (ASIFMA). “What we think should be the next step is a regulator-endorsed full-ecosystem experiment that would explore all the interactions and competitive dynamics. Everyone flags interoperability as a key concern, but all the experiments are still siloed,” Van der Loo said.
An ASIFMA report on Thursday said regulators should expand the scope of their existing sandboxes for experimenting with fintech initiatives to enable industry-wide trials.
Regulators in Hong Kong, Singapore and Japan have already issued some guidelines about tokenised securities. DBS issued a S$15 million ($11.14 million) bond as a “security token” on its recently established cryptocurrency exchange last month.
However, the ASIFMA report said regulatory and legal challenges were still the main obstacles for companies involved in tokenised securities.
Van der Loo also said banks were further along than asset managers when it came to tokenising securities.
“At the moment it is very much the sell side looking into this to see the efficiencies it can bring. The buyside interest needs to be there as well, but it is coming,” Van der Loo said.
($1 = 1.3462 Singapore dollars)
Related Articles
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.