15.01.2021

HSBC, SGX to Investigate if DLT Offers Efficiency Boost for Bond Markets

The effort will examine the potential of DLT to streamline the issuance and servicing of fixed income securities, debt instruments that pay fixed interest to investors, with a specific focus on the Asian bond markets.

Can digitalizing bonds with distributed ledger technology (DLT) bring benefits to market participants?

That’s a question being asked by HSBC Singapore in a new trial being developed in partnership with Singapore Exchange (SGX) and investment firm Temasek.

In an announcement on Wednesday, HSBC sets out that, while the Asian bond markets have been seeing speedy growth, issuance and servicing of the instruments lack efficiency without a single platform for sharing data between different entities and tracking bonds across their lifecycle.

The trial aims to address that shortfall by tokenizing bonds using smart contracts on a permissioned ledger with the intention of streamlining these processes and easing friction in the markets. Ultimately, DLT could cut costs for issuers, investors, bond arrangers and custodians, the bank said.

HSBC is already deep in the blockchain and DLT space, having launched numerous projects involving the tech and often speaking out in advocacy. Last year the bank warned that “digital islands” could inhibit global blockchain-based trade. An exec also called on the U.S. Commodity Futures Trading Commission (CFTC) to make more “positive noise” about DLT to encourage reluctant businesses into using the tech.

While all this seems extremely bullish on the technology, Tony Cripps, HSBC Singapore CEO, argued that DLT’s potential to reduce inefficiencies in the fixed income market still has to be determined. “Only by collaborating with market participants will we fully understand its actual viability,” he said.

“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,” said Lee Beng Hong, head of fixed income, currencies and commodities at SGX.

Huobi Expands to Argentina, Plans to Launch Fiat-to-Crypto Gateway

Singapore-based crypto and blockchain company Huobi Group has rolled out an exchange in Argentina, planning to add support for a fiat-to-cryptocurrency gateway.
Per a press release shared with Cointelegraph on Sept. 17, Huobi officially launched Huobi Argentina using Huobi Cloud, a service that allows users to build over-the-counter (OTC) and digital asset exchanges on top of Huobi’s existing platform.

Fiat-to-crypto gateway

For now, Huobi Argentina’s users can purchase digital currencies with Argentine Pesos (ARS) using Huobi’s OTC service, but the exchange is planning to set up a fiat gateway to trade ARS for crypto in October of this year. This will purportedly enable users to buy crypto using credit cards, transfer and some local digital payment providers.

Carlos Banfi, CEO at Huobi Argentina, said that the move could contribute to attracting global investment, adding:

“Argentina is South America’s most promising market for blockchain development. There already exists a general consensus to break from a reliance on the local currency and banks, and with Huobi’s entrance into the market, it is a great opportunity to move the needle on blockchain and crypto adoption  in Argentina.”

Huobi’s confident expansion

In late July, Huobi’s Thailand-based subsidiary secured the country’s fifth official license to operate a fully-regulated digital asset exchange. Huobi Thailand is expected to launch in Q3 2019, offering both regulated crypto-crypto trading and fiat on-ramps.

In June, news broke that Huobi exchange would expand its operations to Turkey, planning to have a crypto-to-fiat onramp for Turkish users by the end of 2019. Huobi’s entrance to the Turkish market will be overseen by official branch of Huobi Group, Huobi Middle East, Africa, and South Asia (Huobi MENA), which is based in Dubai.

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