Southeast Asia-based DBS Bank becomes the first bank in Asia to complete an intraday repurchase transaction on a blockchain-based network.
The transaction used JP Morgan‘s intraday repurchase application on ‘Onyx Digital Assets’. The blockchain-based network supports instant settlements and the maturity of transactions within hours. The application provides a faster service than the current industry average of one to two working days.
Andrew Ng, head of treasury and markets at DBS Bank, explained why the bank turned to a blockchain-based solution. He commented: “Repurchase agreements are a traditional and well-established method of raising financing. But, infrastructural and technical inefficiencies mean the minimum term has usually been one day.
“In the past, banks around the world had to explore alternative routes for intraday financing requirements. Through leveraging efficiencies of a blockchain-based solution, we are able to raise USD funding in compressed timeframes which are beneficial to our liquidity needs.”
“As a bank that is known to be at the forefront of digital transformation, we will continue to leverage leading technologies to provide market participants with accelerated access to liquidity coupled with better risk management.”
DBS Bank has been no stranger to blazing new trails regarding blockchain technology. The Singapore-based bank successfully tested trading digital assets on a public blockchain. The test was completed as part of ‘Project Guardian’, set up by the Monetary Authority of Singapore to pilot use cases for digital assets.
Scott Lucas, head of markets distributed ledger technology at JP Morgan, shared his thoughts on the solution. Lucas explained: “Our intraday repo solution helps clients boost operational efficiencies and accelerate settlement times for their repo activities. We are excited to have our first Asia-domiciled client live on the application, as the network continues to grow.”
Ed Bond, head of trading services Asia Pacific at JP Morgan, also commented. Bond said: “This is the first time that JP Morgan is acting as both ‘Triparty Agent’ and ‘Collateral Token Agent’, which is an exciting development for the market. DBS has been a great partner on this project and we will continue looking at ways to innovate and help our clients navigate market challenges.”
Recently, JP Morgan announced plans to open a new office in Greece, as the investment banking company looks to expand operations. Plans for the office to accommodate a new ‘Payments Innovation Lab’, which is to provide research and development to the payments business globally, including working with Onyx.