Singapore Exchange (SGX) and Temasek Holdings have, on Jan 22, entered into a joint venture (JV), which is set to be Asia Pacific’s (APAC) first exchange-led digital asset venture.

The venture will focus on capital markets workflows through smart contracts, as well as ledger and tokenisation technologies.

The partnership builds on the collaboration between SGX, Temasek and HSBC in August 2020, which lead to the issuance of Asia’s first public syndicated digital bond for Olam International, which totalled some $1 billion.

Through the JV, SGX will combine its multi-asset experience and strengths in operating market infrastructure, together with Temasek’s expertise in blockchain technology and ecosystem connectivity.

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The JV will also explore partnerships with fixed income issuance platforms to connect to its post-trade and asset servicing infrastructure to provide issuers, arranger banks, lawyers, investors and paying agents with a comprehensive network for Asia bonds.

In addition, the JV will focus on other existing and emerging asset classes with a growing market demand including sustainable finance.

Lee Beng Hong, senior managing director, head of fixed income, currencies and commodities (FICC) at SGX says, “The early success in our digital bond issuance platform has paved the way for SGX to make a larger move into digital assets, and we are very excited to take our digital asset business to the next level in partnership with Temasek.”

“Together, we will capitalise on digitalisation trends that continue to shape global capital markets, and advance the development of capital markets infrastructure in Asia,” he adds.

Pradyumna Agrawal, managing director, [email protected], says, “We have been tracking the evolution of financial market systems and the opportunities for development of digital infrastructure that will transform how financial transactions are conducted. We are pleased to partner SGX in this effort towards continual improvement of capital markets through the development of innovative end-to-end digital asset solutions.”

Shares in SGX closed 15 cents lower or 1.5% down at $10.09 on Jan 22.