Bursa Malaysia is right now utilising blockchain in a proof of concept geared towards greater transparency and smoother operations in the securities borrowing and lending (SBL) market.
The project aims to ramp up efficiency, speed and capacity in securities in the lending pool.
This initiative could the gateway for Bursa Malaysia to undertake deeper explorations in blockchain technologies to address other operational challenges prevalent to SBL activities in Malaysia and discover more opportunities to drive end-to-end functionalities such as market interest discovery, trade capture and collateral management.
Bursa’s stance is that blockchain brings about fundamental shifts in how the market works, thinks and hires. Therefore, the process of utilising this technology is seen as a valuable learning experience in the field to build knowledge and potentially help drive Malaysia towards becoming a developed market.
Run in partnership with the Bursa’s technology partner, Hong Kong-incorporated FORMS, the PoC will involve a diverse range of SBL market participants, according to the press release.
Bursa Malaysia’s CEO, just appointed last December, Datuk Muhamad Umar Swift said:
“Across different markets, empirical studies show that short selling helps provide additional liquidity and improves price efficiency.”
“The growth potential of Malaysia’s SBL market makes it a prime candidate where the power of blockchain technology can create a considerable impact.”
Affin Hwang Investment Bank Berhad, CIMB Investment Bank Berhad, Citibank Berhad, Kumpulan Wang Persaraan (Diperbadankan) and Malacca Securities are collaborating with Bursa Malaysia and FORMS to drive the development of the blockchain-enabled Lending Pool to suit the industry’s specific needs, cost and efficiency pressures.
In related news, Securities Commission Malaysia has also previous released a blueprint for the use of blockchain in OTC markets dubbed Project Castor.
Featured image via Wikimedia Commons
