Hong Kong Exchanges and Clearing Limited (HKEX) has partnered with Digital Asset to introduce the first blockchain platform for financial services in Hong Kong.
The project is set to explore how distributed ledger technology (DLT) could enable HKEX market participants to specify settlement workflows in advance.
According to HKEX, this will help to bridge time zones while enabling real-time synchronisation of post-trade status between asset managers, brokers, custodians and the Hong Kong Securities Clearing Company Limited, HKEX’s clearing house.
The announcement follows the successful completion of a prototype solution for Stock Connect that used the Digital Asset platform and smart contract modelling language, called DAML, to accelerate the post-trade process and reduce settlement risk.
In a speech opening Hong Kong Fintech Week, Charles Li, the chief executive of HKEX, said: “[HKEX] will now be working together with Digital Asset to introduce the first blockchain platform for financial services in Hong Kong.”
He added: “This could be the beginning of a long journey of innovation and revolution and we’re very excited to share this important milestone.”
Li also discussed how blockchain, or DLT, could alleviate the post-trade operational challenges faced by HKEX’s market participants and global investors that trade China-listed A-shares via Stock Connect, due to the tight settlement cycle for Mainland China trades.
