DBS completes intraday repo transaction on a blockchain-based network
Repo transactions will finish within hours instead of one to two days.
DBS has become the first bank in Asia to complete an intraday repurchase transaction on JP Morgan’s intraday repurchase application on Onyx Digital Assets, according to a press release.
Onyx Digital Assets is a blockchain based network that supports instant settlements. Transactions mature within hours instead of the current industry norm, which takes from one to two working days.
“Repurchase agreements or repos are a traditional and well-established method of raising financing, but infrastructural and technical inefficiencies mean the minimum term has usually been one day,” said Andrew Ng, Head of Treasury and Markets at DBS. This has caused banks around the world to explore alternative routes for intraday financing requirements, he noted.
“Through leveraging efficiencies of a blockchain-based solution, we are able to raise USD funding in compressed timeframes which are beneficial to our liquidity needs,” Ng added.