Deutsche Bank Securities and Hashstacs finish PoC for crypto-assets and sustainability-related digital bonds
Deutsche Bank’s Securities Services business in Singapore and Hashstacs (STACS) have finished their proof-of-concept (PoC) Project ‘Benja’.
Project ‘Benja’ was on the use of distributed ledger technology (DLT) for crypto-assets and sustainability-related digital bonds. Set in the context of the nascent ‘tokenised’ securities in the securities market, the two organisations worked on achieving digital assets interoperability across various platforms, along with support for custody solutions.
The PoC grant is part of the Financial Sector Technology and Innovation (FSTI) scheme under the Financial Sector Development Fund – which is administered by the Monetary Authority of Singapore (MAS).
Deutsche Bank’s domain expertise and the respective teams’ technical designs were combined with STACS’ live DLT platform which allows for end-to-end bonds lifecycle management.
STACS and the Deutsche Bank Securities Services were awarded the PoC grant in October 2020. The funding support was acquired to conduct relevant experiments, development and implementation of new technologies in order to support the digital financial services sector.
The PoC’s results were subsequently tested with industry participants – UBS, Malaysia National Stock Exchange Bursa Malaysia, and Union Bank of the Philippines (UnionBank) whose perspectives enriched the PoC with more holistic assessments.
Through their partnership, Deutsche Bank and STACS have been able to successfully remodel and streamline the workflows in order to develop a “Bond in a Box” DLT platform. This helps unlock additional efficiencies along with the ability to issue smart contracts.
The integration has reportedly been tested with payment modes such as UBIN and Diem (formerly Libra), digital custody and asset servicing, and Environmental, Social, and Governance (ESG) financing transparency requirements.
Anand Rengarajan, Asia Pacific Head of Securities Services at Deutsche Bank, said: “We are pleased with the results of this PoC. With innovation at the forefront of our strategy, it is important to us to actively contribute to, and participate in the future of capital markets from a post-trade servicing perspective.
This POC allowed us to assess the practical handling of tokenised assets, as well as the opportunities and challenges that could arise from their commercialisation in Singapore and potentially in other markets.”
Kamran Khan, APAC Head of ESG at Deutsche Bank said: “Data transparency, reliability and security are corner stones of the emerging ESG capital market. This cutting-edge ‘bond in a box’ POC successfully explored the synergies between Fintech and ESG, using distributed ledger and smart contracts capabilities with cross-platform interoperability for ESG-compliant digital securities.”
Benjamin Soh, MD at STACS, said: “We are excited to have taken the first step towards turning a proof-of-concept to a proof-of-commercialisation, through our collaboration with Deutsche Bank, and with other leading financial industry participants. In addition, with the world’s focus turning towards ESG and sustainability, we look forward to expanding our network’s efforts in the sustainability push of the next few decades, via DLT technology as the common technology infrastructural nexus.”