BondEvalue, a company that operates an artificial intelligence-powered news platform, has just been approved to launch a blockchain-based bond exchange under the Monetary Authority of Singapore’s (MAS) Sandbox Express program.
The new platform, known as BondbloX, is described as the “world’s first blockchain-based bond exchange,” and is designed to lower the barrier to bond trading by reducing the minimum investment amount to $1,000.
Before the advent of BondbloX, bonds were predominantly traded over the counter (OTC) through bond dealers, and usually have a minimum investment of $200,000. Because of this, according to the BondbloX founder Rahul Banerjee, only around 50,000 people in Asia can afford wholesale bonds.
Because of this, BondEvalue hopes its new bond exchange platform will help grow the number of bond investors to over 25 million within the next five years.
The platform is built using Hyperledger technology, which will help accredited investors trade bonds through their banks, wealth managers, and financial advisors. The platform will be showcased during next week’s Singapore FinTech Festival (SFF).
This is now the first blockchain-enabled project to make use of the Express Sandbox, which allows potentially disruptive and innovative projects to avoid regulation that would otherwise potentially inhibit their growth temporarily.
The Sandbox Express is a pre-defined environment within which companies can test innovative financial products and services in the market. By allowing projects to operate in a sandbox, the MAS is able to quickly assess the risks and benefits associated with innovative businesses, while limiting any unforeseen side effects that might occur.
As it stands, experimental projects are allowed to operate in the Sandbox Express for up to nine months. During this time, firms are given a chance to overcome business and technical challenges as well as prepare themselves for deployment on a larger scale.
“The ability to gather early feedback from actual customers plays an important part in determining the success of innovation,” said MAS Chief Financial Technology Officer Sopnendu Mohanty.
Meanwhile, Singapore, one of the most forward-thinking spaces when it comes to blockchain and cryptocurrency, has recently joined the list of countries wary of Facebook’s Libra stablecoin.
Images courtesy of Shutterstock.
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