HSBC Singapore has announced a trial with SGX and Temasek to explore the use of DLT for the issuance and servicing of fixed income securities. It is the first end-to-end digitalisation initiative focusing on bond markets in Asia.

The DLT trial will make use of tokenised securities and smart contracts over a permissioned ledger. It aims to streamline workflows and reduce process friction, lowering costs for issuers, investors, bond arrangers and custodians.

Tony Cripps, Chief Executive Officer at HSBC Singapore, said: “The potential of DLT is an evolving story, and its role in overcoming inefficiencies in the fixed income market is yet to be seen. Only by collaborating with market participants will we fully understand its actual viability; by partnering with SGX and Temasek, we hope to explore whether digital assets could become a reality.”

Lee Beng Hong, Head of Fixed Income, Currencies & Commodities at SGX, said: “As Asia’s largest listing venue for bond issuers globally, we are excited to collaborate on a new operating model that could potentially bring cost savings to issuers, arrangers and investors. Having HSBC and Temasek on board will enable us to evaluate holistically whether smart contracts and DLT can solve some of the long-standing challenges in the fixed income issuance ecosystem.”

Chia Song Hwee, President & Chief Operating Officer at Temasek, said: “Blockchain technology has great potential in transforming businesses and opening up new opportunities. We are pleased to partner with HSBC and SGX on this test-bed, with an eye on how the technology can potentially be applied more broadly across a range of products.”