The creation, trading and custody of digital securities have been on the rise, especially in Singapore where the city-state has electronically dabbled in various markets including bonds, funds and alternatives.
A growing number of players in Asia are digitalizing securities from various financial markets to take advantage of the inherent benefits of blockchain technology such as efficiency, programmability and fractionalization.
Singapore, in particular, has been a strong proponent in the space – respondents from a recent ASIFMA survey said the city-state was their top choice as a launching pad for digital securities business due to strong regulatory support and relative maturity of the market.
Digital Securities Issuances
Yesterday, Singapore Exchange-backed (SGX) digital securities platform ADDX and investment manager Investcorp tokenized a U.S. private real estate fund invested in five multi-family complexes with over 2,200 units in Texas, Arizona and Georgia, according to a statement. An undisclosed portion of the $150 million total was raised through digital securities.
Separately, DBS and UOB have also been advancing their own digital securities efforts with the former issuing a $11.35 million bond via security token offering (STO) in May and the latter piloting the digital issuance of a S$600 million bond in June. Issuances were done on DBS’ DDex and Marketnode, respectively – both SGX-backed digital exchanges.
Beyond conventional investments like bonds or funds, Singapore has also seen digital investments in esoteric alternatives: blockchain-based bourse Hg Exchange went live in January trading five whisky-backed securities.
Imminent Shift
Improve cost and efficiency, a larger investor base through smaller lot sizes and extended trading hours – coupled with an openness to digital adoption – makes the region prime for a transition away from traditional securities.
«We expect asset tokenization to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fundraising exercise which we believe will boost Singapore’s ambitions to be a digital asset hub in Asia,» said DBS’s group head of capital markets Eng-Kwok Seat Moey.
«[W]ith everything going on in the regulatory environment, we see a shift to this space as not likely – it's going to be inevitable,» added Benjamin Quinlan, chief executive and managing partner of independent consultant Quinlan & Associates.
