Singapore's stock exchange is working with the Monetary Authority of Singapore (MAS), the city-state's de facto central bank, to utilize blockchain in a bid to improve the efficiency of securities settlements.

The Singapore Exchange (SGX) said in a release on Friday that the collaboration is aimed at scaling up the country's Delivery versus Payment (DvP) capacity so that it's able to automate transactions via blockchain-based smart contracts. DvP is a settlement process that ensures assets are transacted only when corresponding payments are received.

Lending technological support is a list of well-known firms like Nasdaq and professional services firm Deloitte, as well as blockchain startup Anquan, according to the announcement.

The goal is to develop a distributed network where financial institutions and investors can transact securities that have been converted into digital tokens through different blockchain platforms.

The partners said the technology will be engineered based on the open source code resulting from the latest development of Project Ubin, which the MAS initialed in 2016 test out settling interbank transactions via distributed ledger technology.

A detailed report identifying and examining key design considerations will be released by November, according to the release.

Tinku Gupta, the project chair and SGX's head of technology, said in a statement:

The SGX is not the only securities trading platform that is turning to blockchain for potentially faster securities settlements.

Currently, the Australia Securities Exchange is also moving toward a replacement for its existing settlement system built with blockchain startup Digital Asset Holdings, which it expects to roll out in 2020.

SGX image via Shutterstock