Synapse: Hong Kong’s stock exchange modernizes settlement with blockchain and smart contracts

Hong Kong Exchanges and Clearing Limited (HKEX) announces the launch of Synapsesa blockchain platform designed to accelerate settlementand theefficiency and the transparency from market.

“Tokenized financing is promising, but the road to full tokenization is a long one. We must remain pragmatic and recognize that conventional and new systems will coexist”.

These were the words of Emmanuelle Assouan, Head of Financial Stability and Operations at the Banque de France, earlier this week. The Hong Kong stock exchange, HKEXconfirms this assertion with the launch of Synapse.

Blockchain to modernize traditional finance

Finance isn’t just about digital assets. Blockchain technologies are also levers for improvement in this industry. Hong Kong Exchanges and Clearing Limited is making them its own with its new platform.

Operational from October 9, Synapse is billed as an “integrated settlement acceleration platform”. It enables the deployment of DAML smart contracts to standardize and streamline post-trade workflows.

Thanks to this technological contribution, the exchange promises to improve market efficiency and transparency, while reducing settlement risks. Synapse is integrated into the Stock Connect program, which links the markets of mainland China with those of Hong Kong.

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The gains of blockchain lie primarily in operational efficiency. With Synapse, HKEX expects to simplify transactions and provide market players with real-time information on the settlement process.

Real-time data synchronization

Asset managers, brokers, custodians and clearing participants will benefit from real-time data synchronization and improved scalability, helping them to manage the growing volume of transactions,” details the exchange.

HKEX Synapse is an optional service offered to institutional investors participating in the Northbound Stock Connect. It should enable them to better manage their post-trade operations across different time zones.

HKEX Synapse will be linked to The Depository Trust & Clearing Corporation via its Institutional Trade Processing service. Thanks to this integration, global investors and HKEX participants will benefit from the central matching of cross-border transactions”, adds the press release.

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