ADB uses blockchain technology to facilitate cross-border securities transactions
Kuala Lumpur (VNA) – The Asian Development Bank (ADB) has launched a project to make cross-border securities transactions in the Asia-Pacific region more efficient and secure through the use of blockchain technology.
It will seek to develop ways to directly connect central
banks and securities depositories in the ASEAN Plus Three region within a
blockchain network, the ADB said in a statement on January 26.
The ADB said directly connecting the institutions within a
blockchain network could reduce both transaction costs and settlement risks.
However, there might be the possibility that securities are not exchanged
within an agreed time frame.
Cross-border securities transactions in the ASEAN 3 region
are currently processed through a global network of custodians and
correspondent banks, which go through global centres in either the United
States or Europe. As a result, intraregional transaction settlements in ASEAN
Plus Three take at least two days, due to varying operating hours for markets
within the same time zone, it added.
The ADB said the project will be carried out in
two phases including a designing phase which is expected to be completed
by the end of March 2022, and a prototyping phase, scheduled for the second
quarter of 2022.
The results will be discussed with ASEAN Plus Three
government officials and members of the Cross-Border Settlement Infrastructure
Forum of the Asian Bond Markets Initiative, made up of central banks and
securities depositories from across the region, it said.
The ASEAN 3 region consists of the 10-member Association of Southeast Asian Nations plus Japan, China and the Republic of Korea./.