UBS, DBS and SBI to pilot repo with natively issued digital bonds

Singapore’s DBS Bank, Japan’s SBI Digital Asset Holdings and Switzerland’s UBS are executing a pilot repurchasing agreement with natively issued digital bonds. This aims to enable greater flexibility, operational efficiency, faster settlement, and increased efficiency for cross-border distribution and settlement of capital market instruments on digital asset networks.

The pilot was discussed in a press release announcing the publication of a report by the Monetary Authority of Singapore (MAS) proposing a framework for designing open, interoperable networks for digital assets.

One of the use cases detailed in the report is under the banner of “global liquidity pool”. DBS Bank and SBI Digital Asset Holdings are collaborating to explore the feasibility of conducting foreign exchange and government bond transactions against liquidity pools comprising of tokenized Singapore Government Securities (SGS) Bonds, Japanese Government Bonds (JGB), Japanese Yen (JPY) and Singapore Dollar (SGD).

The participants will be issued verifiable credentials to partake in activities on a public permissionless platform. Non-native tokens or tokenized representations of assets will be used to mirror the value of the underlying traditional securities and cash. Tokenized representations of these assets will be issued and supplied to a common liquidity pool.

This enables traders to trade against a pool of tokenized assets as the counterparty instead of multiple different counterparties. The trade will comprise the outright purchase and sale of tokenized SGS bonds, SGD, JGB and JPY. The participating financial institutions will play different roles of liquidity provider and trader in each liquidity pool.

Read the full report

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