UBS, Bursa Malaysia, and Union Bank of the Philippines (‘UnionBank’) join Hashstacs Pte Ltd (‘STACS’) and Deutsche Bank as industry collaborators in their proof-of-concept (‘POC’) known as “Project Benja”. The three industry participants contributed their various domain expertise towards the final Environmental, Social, and Governance (ESG)-enabling and interoperable end-to-end Distributed Ledger Technology (‘DLT’)-enabled bonds lifecycle management solution for the financial industry.
Sharing its perspective as a bond arranger and investor, UBS provided insight into primary market workflows, ESG and green bond formats including sustainability-linked bonds, and ESG-focused investor preferences. UBS also focused on payment interoperability and explored the viability of a range of digital payment and settlement modes.
In order to achieve an effective end-to-end DLT-enabled capital market, Bursa Malaysia’s expertise was to consider the possibilities of a blockchain-powered Central Securities Depository (‘CSD’) that allows for efficient and orderly maintenance of records, which could unlock massive value and opportunities for the industry, bearing in mind that fragmentation in information stemming from different legacy systems used in the financial industry has been raised by all collaborators as a major pain point.
As a premier financial institution in the Philippines and a leader in the digital space, UnionBank shared its expertise as a cross-border Bond Issuer, covering current pain points that issuer face in the traditional capital markets financial infrastructure, requirements for cross-border issuances, as well as social inclusion and Micro, Small and Medium Enterprises (‘MSME’) financing.
With the inputs of the various industry collaborators, the practicality, interoperability, relevancy, sustainability, and effectiveness of the solution created by STACS and Deutsche Bank to simplify global markets in a sustainable and inclusive manner, are validated and reinforced.
Hugo van Kattendijke, Head of Financial Intermediaries, APAC at UBS Wealth Management, said: “Not only does this Proof-of-Concept outline a basic ecosystem for DLT bond issuance and lifecycle management but it also serves an accessible template for the industry in the development of concepts into live commercial transactions. Its focus on ESG, an area in which DLT uniquely enables data-rich products such as sustainability-linked bonds, to deliver significant additional value for clients is particularly exciting.”
Muhamad Umar Swift, Chief Executive Officer at Bursa Malaysia, said: “We welcome this opportunity to collaborate with Deutsche Bank and STACS and contribute to this POC from a perspective of a central depository. This would create new opportunities for many players in a DLT-enabled capital market. Such collaborations are part of Bursa Malaysia’s focus on technology-driven innovation to accelerate the adoption of new technologies that can benefit the wider industry and drive the growth of our markets.”
Catherine Casas, First Vice President and Head of the Blockchain Center of Excellence at UnionBank, said: “DLT is the foundation to building capital markets that are for everyone. It enables smaller businesses to borrow, instills investor confidence through transparency, and provides real-time asset trading and settlement across borders so that everyone, be it an investor or a borrower, can access opportunities from across the globe through capital markets which are truly inclusive.”
Benjamin Soh, Managing Director at STACS, said: “We were able to successfully achieve the project’s goals in a fast few months thanks to the great collaboration and inputs from the team at Deutsche Bank, as well as industry leaders at UBS, UnionBank of the Philippines, and Bursa Malaysia. These esteemed industry collaborators allowed us to truly approach the project from a lens of interoperability, ecosystem-wide roles and impacts of DLT digitalisation on the traditional processes of securities markets, including the enablement of better ESG and sustainable financing. We are thrilled to have delivered a functional industry-wide platform through this collaboration and look forward to achieving more and building better together, to unlock value for the entire industry.”