The Hong Kong Stock Exchange (HKEX) strengthens its trading infrastructure with Synapse, a blockchain-integrated upgrade to the Stock Connect system, improving settlement efficiency and reducing risks.
In a strategic move aimed at enhancing its trading infrastructure, the Hong Kong Stock Exchange (HKEX) has introduced Synapse, a blockchain-integrated upgrade to its Stock Connect system.
The Stock Connect system plays a pivotal role in facilitating cross-border trading by linking the stock exchanges of Hong Kong and mainland China.
By implementing blockchain technology through Synapse, post-transaction workflows are set for a transformative overhaul, leveraging smart contracts to significantly reduce settlement risks and streamline the entire process.
One of Synapse’s standout features is its ability to simultaneously generate reconciliation instructions for all relevant parties in the reconciliation chain. This parallel processing capability is vital for connecting traders across different markets, offering real-time visibility into trade progress through quick status updates.
The Stock Connect system has demonstrated remarkable growth, with an average daily turnover in the first half of 2023 reaching $15.302 billion (RMB 109.3 billion), marking a 5 percent increase from the previous year and an impressive 50 percent surge from 2020 levels, underscoring its rising significance in the financial world.
Furthermore, on a global scale, the Australian Securities Exchange (ASX) is exploring blockchain adoption to replace its current consensus system, CHESS, aligning with the industry’s trend toward blockchain integration for enhanced efficiency and security in trading.
