Bursa Malaysia Berhad has completed its first blockchain-based proof-of-concept (PoC) for securities borrowing and lending (SBL), furthering the country’s ambitions as a developed capital market.
The blockchain-powered solution was executed and tested with Bursa Malaysia Bhd’s tech partner Forms Syntron Information (HK) Ltd. and industry collaborators including Malacca Securities Sdn Bhd, Kumpulan Wang Persaraan (Diperbadankan), Citibank Bhd, CGSCIMB Securities Sdn Bhd, and Affin Hwang Investment Bank Bhd.
Datuk Muhamad Umar Swift, CEO of Bursa Malaysia, has pointed out that one of the key characteristics of a developed capital market is a vibrant SBL market driven by new technologies.
“As such, it is imperative that we tackle the operational challenges of today with a technologically driven solution that is flexible and scalable into the future. The PoC also brings in new knowledge, insights and practical experience in harnessing digital innovation – a core requirement of any exchange that aims to be a leader in its space in the future,” he said.
An agile methodology was utilized to develop and test ‘SBL PoC 1’, the first of its kind in Southeast Asia. The blockchain solution is expected to increase efficiencies, transparency, and trust in the SBL market with smart contracts and secure, shared ledgers. The ledgers store immutable, traceable, and auditable information, such as order confirmations and trade negotiations.
In addressing challenges in the Malaysian SBL market, emerging technologies such as blockchain has been adopted, with SBL PoC 1 as the start of the country’s long-term plan to develop the market. SBL PoC 1 is hoped to pave the way for developing and testing blockchain-enabled solutions to transform the Malaysian SBL market in the future.
Bursa Malaysia Bhd is seeking more partners and collaborators to develop future PoCs as part of its roadmap for achieving a developed SBL market.
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