HKEX Unveils Groundbreaking Blockchain-Powered Settlement Platform

The Hong Kong Stock Exchange (HKEX) is on the cusp of a transformative endeavor, as it gears up to revamp its Stock Connect system. This platform plays a pivotal role in facilitating trade between Hong Kong and mainland China. The audacious upgrade, christened Synapse, heralds a new era by seamlessly integrating state-of-the-art blockchain technology and smart contracts. At the heart of this evolution lies a mission to refine post-trade operations and curtail settlement risks, signifying a monumental stride in cross-border stock trading.

Synapse introduces a groundbreaking feature - the simultaneous generation of settlement instructions for all entities within the settlement chain. This breakthrough holds the promise of expediting the entire process, ensuring that all involved parties receive near-instant updates on the trade's progress. This agile and synchronized methodology is essential for harmonizing the operations of traders in distinct markets.

The initial half of 2023 witnessed a commendable performance by the Stock Connect, boasting an average daily turnover of $15.302 billion (equivalent to 109.3 billion RMB). This notable feat represents a 5 percent upswing from the preceding year and an impressive 50 percent surge from 2020 levels.

Australia is poised to embark on a parallel trajectory in its financial sector. The Australian Securities Exchange (ASX) is actively exploring the integration of blockchain technology to modernize its settlement system, famously known as CHESS. This forward-looking initiative was reported by the Australian Financial Review in the previous year.

The eagerly anticipated launch of Synapse in Hong Kong, slated for October 9, signifies a monumental leap towards heightened efficiency and transparency in cross-border stock trading. The reverberations of this development are poised to extend far and wide, reshaping the financial landscape in the region. The Synapse project stands as a testament to HKEX's unwavering dedication to propelling innovation and steering the course of global stock trading.

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