The Malaysian stock exchange will explore the digitization of the Blockchain bond market, through a plan known as “Project Harbor”.
For starters, according to a company press release. The Malaysian Stock Exchange (Bursa Malaysia), will explore the Blockchain bond market.
This plan is known as Project Harbor, which will use Distributed Ledger Technology (DLT). Additionally, it will allow a single source of information to be shared securely between participating banks and the exchange.
Steps of Project Harbor in Malaysia
The first step in the project is to develop a registry for Labuan Financial Exchange (LFX). A bond market and a subsidiary of the Malaysian Stock Exchange.
Similarly, LFX is a subsidiary of the Malaysian Stock Exchange, based in Singapore. Mainly, he is collaborating with the development firm Fintech.
In this way, the Executive Director of Bursa Malaysia, Datuk Muhamad Umar Swift, stated that the main objective of the project is to develop the potential of Blockchain. To analyze the possibilities associated with the concept of asset tokenization.
He also added that: “The POC, in partnership with Hashtacs, presents an opportunity to provide a valuable learning experience. To promote knowledge and obtain ideas, which will allow us to grow in the Blockchain bond market. ”
In addition, Umar Swift explained that this proof of concept seeks to increase operational efficiency. With the condition of reducing the costs associated with operations, as well as the costs of issuing bonds.
The Hashstacs Company
Hashstacs is a Singapore tech finance development company. The company specializes in asset management, custody services, post-trade agreements, digital identity, and financial inclusion.
It should be noted that Hashstacs will also create a Blockchain solution. This to allow the issuance, publication, negotiation and compensation of bonds from the platform.
Finally, the technology of Smart Contracts has been enabled to automate the movement of funds and securities without problems. This increases the service of assets, as well as the provision of liquidity to market participants.
In this regard, Benjamin Soh explained that these developments are a crucial step in Malaysia’s efforts to attract the inclusion of regional and international bonds.
The Malaysian Bond Market
We understand that it is one of the most developed and dynamic markets in the region. It is also the largest local currency bond market for the Association of Southeast Asian Nations (ASEAN).
That is why the market offers a wide range of instruments, considering the fact that it has the largest Sukuk market in the world. Thereafter, domestic and foreign investors can buy and sell conventional and Islamic debt instruments through over the counter (OTC) markets.
The truth is that, in Malaysia, almost all the securities are transferred electronically through the Negara Malaysia Bank (BNM) real-time Electronic Funds and Securities Transfer system. Operated by its subsidiary, Malaysian Electronic Clearing Corporation (MyClear).
To wrap up the idea, this initiative is part of the Malaysian Stock Exchange’s focus on technology-driven innovation to deliver on its promise to create opportunity.