Euroclear and Singapore’s Marketnode announced the integration of their respective fund systems, FundsPlace and Fundnode. It follows an investment by Euroclear in Marketnode last year, joining early backers HSBC, SGX and Temasek. Fundnode is a blockchain-based fund settlement infrastructure launched in Q2 2024 and developed in conjunction with Singapore Funds Industry Group (SFIG), which is co-chaired by the Monetary Authority of Singapore (MAS). The combined offering provides a fund order and processing solution for retail and institutional funds in Singapore.

Euroclear’s FundsPlace supports more than 250,000 funds from over 2,500 asset managers. Now FundsPlace clients can potentially distribute these funds in Singapore via Fundnode. For Fundnode participants, it broadens the investments available beyond domestic funds.

MAS statistics show that Singapore had S$5.4 trillion ($4.2 trillion) in assets under management in 2023, with 77% sourced from outside the city-state. Europe lags behind with just a 13% market share, compared to Asian countries outside of Singapore (33%) and North America (20%).

Beyond expanding fund access, Fundnode brings the typical benefits one expects from blockchain – greater automation, a single source of truth reducing the need for reconciliation and faster settlement times.

Meanwhile. Marketnode has ambitions that stretch beyond Singapore to provide an Asian funds hub, as outlined in an op-ed by CEO Rehan Ahmed last year. He said, “This milestone marks an important step in our journey as we continue to scale our funds market infrastructure in Asia-Pacific and beyond. The integration with Euroclear FundsPlace will provide our clients with a powerful toolset to unlock new business opportunities in public and private funds.”

Euroclear has been expanding its adoption of DLT since launching D-FMI its issuance platform in 2023. The inaugural transaction involved the issuance of a digitally native note by the World Bank.

Apart from investing in Marketnode last year, the company also took a stake in French fund distribution platform IZNES earlier in the year. Additionally, it is exploring tokenized collateral with Digital Asset.

The financial market infrastructure (FMI) is taking part in numerous tokenization sandboxes, including Singapore’s GL1 public permissioned blockchain initiative, Hong Kong’s Project Ensemble and the UK’s Digital Securities Sandbox.

These activities reflects a broader trend. Euroclear together with the world’s other two largest FMIs, Clearstream and the DTCC, have been suggesting standards for tokenization and digital asset adoption. While many see a reduced role for central securities depositories (CSDs) and other intermediaries, they want to establish a seat at the table.