KUALA LUMPUR: CIMB Group Holdings Bhd has completed a pilot test of tokenised sukuk settlement using tokenised deposits, involving RM1.38 billion worth of tokenised sukuk subscribed by 12 institutional investors.
The pilot test was conducted in relation to a RM1.68 billion sukuk issuance under CIMB Islamic Bank Bhd’s existing RM10 billion senior sukuk wakalah programme, which attracted 46 investors, the group said in a statement today.
It said that of the total issuance, RM1.38 billion was represented in tokenised form and subscribed by 12 institutional investors, while the remaining RM300 million was issued as traditional sukuk.
The group said tokenisation allows a conventional financial asset such as a sukuk to be represented digitally using distributed ledger technology.
“When paired with tokenised deposits, which represent commercial bank money digitally, it has the potential to enable greater automation and more integrated settlement of financial transactions.
“This could ultimately reduce settlement delays, improve liquidity management and make the movement of funds more efficient,” it said.
CIMB Group said the pilot was undertaken as part of its participation in Bank Negara Malaysia’s Digital Asset Innovation Hub, which provides a controlled environment for financial institutions to test new digital asset applications.
“CIMB has also been engaging with the Securities Commission Malaysia on the development of tokenised capital market products.
“The tokenisation layer does not alter the underlying economic or shariah structure of the sukuk,” it added.
Meanwhile, CIMB Group regional head of financial institutions and tokenisation, group wholesale banking, Sylvia Wong said tokenisation could eventually facilitate faster movement of funds and reduce transaction costs, although the industry is still early in its journey.
“Imagine, it is (allowable) to be instantaneous for RM100, but can you imagine if it is instantaneous for RM100 million? Perhaps, banks may not be ready for that kind of frictionless settlement,” she told a press conference today.
Wong said the pilot would help CIMB better understand how the different components of tokenised transactions could connect as the financial system moves toward potentially faster, more efficient settlement.
“We are still part of the journey. Again, this is a pilot, just to remind everyone. I would like to figure out how things connect and so on.
“But if you can just envision the future – something that is frictionless, or what I should say, really to reduce costs, I think ultimately (we should move towards) being able to create faster movements of funds,” she said.
