HKEX, one of the world's top 8 stock exchanges, is integrating blockchain technology and smart contracts to streamline and improve the efficiency of settlements.
The Hong Kong Stock Exchange is working on developing a new platform, called HKEX Synapse, which integrates blockchain technology and smart contracts to streamline settlements, improving efficiency, accessibility and transparency, reducing risk and increasing investor confidence.
In a Press releaseHKEX said the integration of new technologies encourages automation so that international investors can better manage their post-trade operations, more quickly and with a higher level of security.
HKEX Synapse is a new integrated settlement acceleration platform that will implement DAML smart contracts to “standardize and streamline post-trade workflows, improving operational efficiency and transparency while reducing settlement risks,” the exchange said.
This new platform, which will be launched on October 9, will provide investors with a more efficient, accessible and cost-effective channel to participate in the capital markets in mainland China and Hong Kong through the Stock Connect service. The exchange introduced HKEX Synapse as the latest enhancement to Stock Connect to increase post-trade efficiency and create a stronger ecosystem that suits the current and future needs of investors and the market.
Improving the settlement market through blockchain
Through HKEX Synapse, investors will have access to a number of benefits, including real-time visibility and insights into the settlement process, making it easier for them to manage their trades. In addition to this, the new platform offers enhanced scalability that enables faster processing of trades and helps handle the growing trading volume of Stock Connect, which surpassed 109.300 billion yuan (about $14.900 billion) in the first half of this year.
In 2017, HKEX announced that it would begin implementing blockchain technology to reduce settlement times, which typically take several days.
Separately, in 2020, French bank BNP Paribas also announced the integration of DAML smart contracts to design new trading and settlement applications to enable its investors and clients to connect with stock exchanges around the world, including HKEX, more efficiently.
Financial institutions are increasingly integrating blockchain technology as part of their adaptation and evolution process, transforming the way they do business and carry out their operations.
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