Bank of Singapore tests DeFi on Polygon blockchain

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2023-01-23 13:03:29

Project Guardian was built by the monetary authority of Singapore in summer 2022. Involves the adoption of the Polygon blockchain and DeFi dApps such as Aave and Uniswap for banks and financial institutions. The project has seen Singapore’s DBS Bank with JPMorgan and Japan’s SBI Digital as well as Marketnode.

The first phase of the trial involved transactions in tokenized Singapore government securities, the Singapore dollar (SGD), Japanese government bonds, and the Japanese yen (JPY). Those assets will be used on the Polygon blockchain via dApps like Aave, Uniswap.

“We wanted to demonstrate that it was possible to tokenize government securities and cash in the Uniswap liquidity pool,” said Han Kwee Juan, head of planning and strategy at DBS bank, Singapore. and Aave on the Polygon blockchain.

Solve the problem of “providing price data” by getting live market prices from reputable sources like Bloomberg or Refinitiv.

Traditional banks and financial institutions have seen the opportunity and efficiency achieved by copying the success of DeFi in Crypto. Promises to bring trillions of dollars into this game.

Explain why Polygon was chosen for the Guardian project. DBS’s Kwee Juan points out that Polygon has cheap gas fees.

The goal of the Guardian project is to lay the foundation for the construction of world-class liquidity pools. Enables faster transactions, more transparency, lower payment risks and many other benefits.

For the present. Foreign exchange and government securities are mainly traded through the OTC (over-the-counter) market involving many intermediaries, so it will be difficult in the settlement process.

Smart contracts that will reshape the way execution can be achieved in a highly reliable way, especially if it takes place in a licensed marketplace where all anonymous wallets are verified across reliable KYC (know your customer) processes.

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