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The session began with Paroche Hutachareon, senior expert on bond market development, Public Debt Management Office Thailand covering the latest developments in the country. “The Bank of Thailand has been very active in the digital asset space, having leveraged DLT to reduce bond settlement times from 14 days to just two,” he told delegates.
More recently, he has been involved in a project that saw the Thai government launch a savings bond using blockchain technology1. “Savings bonds are traditionally sold to people over 60 who are sitting on a lot of wealth and are wanting some extra reward,” he explained. “We thought blockchain technology could help promote financial inclusion, allowing us to lower the unit for investment to encourage the younger generation and those in lower income groups to also have access to this financial asset.”
Developments in Singapore were covered by Alexandre Kech, CEO & co-founder of Onchain Custodian, a custody and open finance service for digital assets, who noted that the city state’s regulators have been relatively favourable and forward looking. He added that “the Payments Service Act has been enabled2, which stipulates that entities, such as crypto exchanges or custodians dealing with digital payment tokens or E-money in the form of stable coins, will need to obtain a licence and will have to comply with stringent procedures.”
On the securities token side, the Monetary Authority of Singapore’s (MAS) stance is that a digital security remains a security, which reflects no real change to existing regulation. Meanwhile, the Singapore Exchange (SGX) issued its first digital bond using blockchain technology in September 2020, with the objective of making it a pilot programme3.
Alessio Quaglini, CEO of digital asset custody platform Hex Trust, agreed the webinar’s dominant theme is that regulation is fast becoming clearer. In Hong Kong “we’ve seen the Securities and Futures Commission granting the first licences to broker dealers, as well as exchange platforms in principle, and they are also putting together a framework for asset managers operating in the space.”
For Samar Sen, Global Head of Digital Products and Client Connectivity, Securities Services, Deutsche Bank, now is the perfect time to be discussing digital assets. In July 2020, the Office of the Comptroller of the Currency (OCC) in the US issued a letter4 outlining how US banks can interact with cryptoassets. In Switzerland, the Swiss Financial Market Supervisory Authority (FINMA) is already trying to build a secondary market for tokenised securities, while, in Germany the financial regulatory authority, aka BaFin, has started giving guidance on how to be a licensed crypto custodian. So, he concludes, “we are seeing a lot of movement in this space – not just in Asia, but around the world”.
Reflecting on the current state of play, Avaneesh Acquilla, Chief Investment Officer, Arrano Capital, referenced the very unregulated Initial Coin Offering (ICO) boom of 2017, which was driven by a number of bad actors and tarnished the industry’s good name. “I think that needs to be cleaned up a little, and I think the move forward in regulation is certainly helping in this respect,” he commented.