UBS, SBI and DBS have launched the world’s first dwell repurchase transaction (repo) with a natively-issued digital bond on a public blockchain.
The transaction routinely and immediately settled a repo, digital bond buy and redemption utilizing regulated digital fee tokens, throughout regulated entities positioned in three totally different jurisdictions (Japan, Singapore, Switzerland).
Carried out as a part of MAS’ Venture Guardian, the transaction highlights how blockchain expertise allows cross-border distribution and settlement of capital market devices in a extremely environment friendly, versatile and cost-effective method whereas enhancing liquidity administration for establishments.
The transaction concerned a repo to borrow tokenized Japanese Yen (JPY) towards a JPY-denominated natively-issued digital bond, with the borrowed tokenized JPY used to finance the acquisition of the identical bond. The next digital bond redemption and fee of principal and curiosity at maturity was executed on-chain as effectively, demonstrating the potential to cowl a complete transaction lifecycle on a public blockchain.
Mike Dargan, UBS Group Chief Operations and Expertise Officer mentioned:
“With this pioneering transaction, we proved the feasibility of executing a completely automated and immediately settled transaction throughout a number of jurisdictions by leveraging a public DLT community below a strict compliance framework. The versatile nature of our UBS Tokenize service, allowed our companions to simply adapt and leverage our revolutionary product framework and expertise capabilities, to their infrastructure and transaction wants.”
Fernando Luis Vázquez Cao, Chief Government Officer of SBI Digital Asset Holdings mentioned:
“At SBI Digital Asset Holdings (SBI DAH), we’re constructing an institutional grade digital asset ecosystem and are prepared for its commercialization. This groundbreaking transaction demonstrates what will be executed in Japan and cross-border, in offering revolutionary and environment friendly services and products to the market and shoppers. It is usually an instance of the power of partnerships SBI DAH has with massive international establishments and throughout the SBI group, with SBI SECURITIES as counterparty to the repo transaction and Shinsei Belief & Banking because the issuer of JPY stablecoin.”
This transaction demonstrated advantages for monetary markets, reminiscent of: real-time 24/7 settlement, operational and capital effectivity whereas guaranteeing compliance and safety necessities.
As a part of Venture Guardian in 2023, UBS Asset Administration additionally collaborated with SBI Digital Markets to conclude a technical pilot for the issuance and distribution of a tokenized Variable Capital Firm (VCC) fund on a permissioned surroundings of the Ethereum community. The pilot is a part of UBS’s international distributed ledger expertise technique, targeted on leveraging private and non-private blockchains networks for enhanced fund issuance and distribution. It additionally kinds a part of the broader growth of UBS’s tokenization companies by UBS Tokenize.
From the SBI group perspective, the transaction and broader participation in Venture Guardian are the results of the brand new ecosystem of institutional grade digital asset infrastructure developed by SBI DAH. This contains SBI Digital Markets, AsiaNext, SBI Zodia Custody and SBI Safety Options. The corporate additionally engages intently with licensed group firms reminiscent of SBI SECURITIES, Shinsei Belief & Banking amongst others to deliver digital options to the market.