DBS Bank Applies DeFi Tech To Trade Forex And State Securities

A Prominent group of financial services in Asia, DBS Bank, is utilizing decentralized finance (DeFi) in the case of a project supported on the behalf of the central bank of Singapore. A trading trial of government securities and foreign exchange (FX) has been started by DBS while using private or permissioned DeFi-based liquidity pools.

DBS Bank Utilizes DeFi Technology to Trade State Securities and FX

The respective move is included in Project Guardian (a joint cross-industry endeavor led on the behalf of the Monetary Authority of Singapore (MAS). The trade took into account the sale and purchase of Singapore government securities (SGS) which are tokenized, the Singapore dollar (SGD), the Japanese yen (JPY), as well as the Japanese bonds.

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As stated by a spokesperson for the bank that the launch of Project Guardian was carried out on the mainnet of Polygon with the utilization of a fork of the v2 protocol of Uniswap. In addition to that, the representative mentioned a couple of chief implementations required to take place to move nearer to an organizational-scale DeFi protocol, taking into account verifiable price oracles and credentials.

DeFi to Revolutionize Singaporean Finance with More Liquidity

The project has signified that trading on an isolated DeFi protocol paves the way toward concurrent activities of immediate trading, custody, clearing, and settlement. This endeavor could likely transform the present trading procedures by offering finer liquidity throughout diverse financial markets and assets, as per DBS. Han Kwee Juan, the chief strategy officer at DBS, also remarked on the move.

He asserted that the unique developments of Project Guardian provide a basis for the establishment of worldwide organizational liquidity pools permitting rapid trading, enhanced transparency, minimized settlement risks, as well as the rest of the advantages. In the words of Han, smart contracts are very promising for the verification, and execution of trading.

According to him, smart contracts will reform the manner to achieve execution in a very trusted manner, particularly in the case of some permissioned markets comprising anonymous wallets that are validated on the behalf of trust anchors like Know You Customer and other such procedures.

He additionally revealed that the investors prefer a liquid market as there are no intermediaries. At present, the government securities and FX are fundamentally transferred via the over-the-counter markets taking into account several intermediaries paving the way toward hindrance in the procedure of settlement, Han added.