The blockchain project is being undertaken in partnership with ConsenSys, Fujitsu, R3 and Soramitsu
The Asian Development Bank has launched a project to make cross-border securities transactions in Asia and the Pacific more efficient and secure through the use of blockchain technology.
Working with leading blockchain companies, the development bank, responsible for providing loans, technical assistance, grants, and equity investments to promote social and economic development in the Asia Pacific, is seeking to develop ways to directly connect central banks and securities depositories in the ASEAN+3 region within a blockchain network.
The ASEAN+3 region consists of the Association of Southeast Asian Nations, as well as Japan, China, and South Korea. It is hoped that directly connecting institutions based in these countries within a blockchain network could reduce both transaction costs and settlement risks.
Currently, cross-border securities transactions in the ASEAN+3 region are processed through a global network of custodians and correspondent banks, which go through global centre in either the US or Europe.
As a result, intraregional transaction settlements in ASEAN+3 take at least two days, due to time differences as well as varying operating hours for markets within the same time zone, according to the Asian Development Bank.
Its blockchain project, to be undertaken in partnership with ConsenSys, Fujitsu, R3, and Soramitsu, will be carried out in two phases. Design of the network be completed by the end of March 2022, while prototyping is scheduled for Q2 2022.
Results will be discussed with ASEAN+3 government officials and members of the Cross-Border Settlement Infrastructure Forum of the Asian Bond Markets Initiative, made up of central banks and securities depositories from across the region.
Project partners will also examine systems interoperability and the viability of central bank digital currencies in the region.