Aaryamann Shrivastava
FXStreet
- The banks interchanged government securities, bonds and currencies.
- The trades were conducted on Polygon, enabling DeFi-enabled financial transactions between banks.
- Institutional net flows have been consistently disappointing due to the volatile market.
Banks and governments around the world are considering blockchain technology as the next step in technological advancements. Singapore incorporated this technology with Decentralized Finance (DeFi) into testing cross-country institutional digital asset trading.
Singapore welcomes institutional DeFi
In an announcement on Wednesday, the Monetary Authority of Singapore (MAS) shared the completion of the first industry pilot of its Project Guardian. The project has been initiated to explore the potential DeFi applications in institutional markets.
In the pilot, DBS Bank, JP Morgan and SBI Digital Assets Holdings participated. These financial institutions conducted transactions consisting of foreign exchanges (forex) as well as government bonds. Liquidity pools comprising tokenized Singapore Government Securities Bonds, Japanese Government Bonds, Japanese Yen (JPY) and Singapore Dollar (SGD) were used for the same.
Through this pilot, MAS demonstrated the potential of cross-country exchange of tokenized assets that can be traded, cleared and settled instantaneously among direct participants. The announcement further stated,
“This frees up costs involved in executing trades through clearing and settlement intermediaries, and the management of bilateral counterparty trading relationships as required in today’s over-the-counter (OTC) markets.
For performing the pilot, AAVE on Polygon was used. This is because the institutions intended to execute the trades on Ethereum but with cheaper gas fees. However, future operations of the project could observe the use of other blockchains as per MAS.
Institutions and crypto elsewhere
While Singapore is expanding its institutional operations, such existing investors within the U.S. have been holding back. According to the CoinShares data, the weekly transactions as of October 28 only registered inflows worth $6.1 million from the hands of institutions.
Institutional flows as of October 28
Except for Bitcoin’s $13.4 million inflow and XRP’s $500K inflow, every other asset noted outflows. As the crypto market continues to maintain a broader bearish sentiment, these investors will also continue making nominal movements.
Asset-specific net flows
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ethereum whales turn bullish with Shanghai upgrade less than a month away
Ethereum (ETH) whales holding between 1,000 and 10,000 ETH have been scooping up the altcoin consistently for a week. With the countdown to the Shanghai upgrade and the ETH token unlock event, there is a spike in Ethereum demand among retail investors.
Ripple price to close the week with a bang as next week will be crucial for another 20% profit
Ripple price is closing this week with very profitable numbers, even if a fade is ongoing. The fade occurred after bulls received a firm rejection at $0.50 and have been trading lower from that level since. If bulls can keep their hands on this momentum and the Relative Strength Index (RSI) is not overbought, at least some 20% profit is being prepared for next week.
Will Cardano price advance as analysts call it one of the favorite altcoins next to EOS and COLT to pop?
Cardano (ADA) price is making the cut and has been shortlisted by several analysts that have put ADA in their top altcoin, primed to explode to the upside soon. ADA is flirting with a second week of gains and could recover its attempt to hit $0.415 as a crucial level for any further uptrend or downtrend.
Is the new partnering-up strategy the right way for Vechain price to avoid a 30% correction?
Vechain (VET) price had a busy week as several new partnerships were announced. Next to integrating with Dappradar to promote cross-chain visibility, the partnership with Boston Consulting Group might be the one that draws the most attention. Vechain price though is not taking this news in a good way and rather is at risk of tanking further.
Bitcoin: Should you trust this BTC sell signal or wait for $34,000?
Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state.