Singapore's Infocomm Development Authority, Standard Chartered Bank, and DBS Bank have completed a six-month project to build a blockchain-based invoice trading platform for banking institutions. Gaut
Singapore's Infocomm Development Authority, Standard Chartered Bank, and DBS Bank have completed a six-month project to build a blockchain-based invoice trading platform for banking institutions. Gautam Jain, Standard Chartered's managing director and global head of client access, told Global Trade Review that the proof-of-concept will begin commercial operation in 2016.
The three partners hope to attract participation from other banks and government agencies. Shirish Wadivkar, head of payables, receivables and flow FX at Standard Chartered, told Asset magazine that the initiative aims to "create an ecosystem in Singapore that improves its standing as a trade center and then take it global."
Khoong Hock Yun, assistant chief executive of the development group at IDA, stated: "it is essential for strong public-private sector partnerships to flourish to create a Smart Financial Centre with world class leading edge solutions that benefit our businesses."
Singapore unveiled the Smart Nation initiative in August 2014 to position the city-state as the world's first hyper-connected country, where technology would reshape the quality of life for citizens. Ravi Menon, managing director of the Monetary Authority of Singapore, has contended that a financial center must mirror this ambition.
Jacqueline Loh, deputy managing director of MAS' FinTech and Innovation Group, described the proof-of-concept as exemplifying "the innovative spirit of Singapore's Smart Financial Centre to leverage blockchain technology to support economic trade – which is the lifeblood of Asia's economy."
The platform runs on Ripple's blockchain technology. Banks can input invoices into the system, converting them into digital assets. All participating banks gain visibility into the position and progress of each invoice across the network. The design operates as an open ecosystem, allowing external parties to verify the authenticity of documents being financed. This structure prevents any single invoice from being financed multiple times and allows banks to provide credit to suppliers at earlier stages in their supply chains.
Jain said: "It was essential to choose an open-source, consensus-based protocol for our PoC. Ripple was as good as any; we continue to explore what would be the right protocol as this space is fast evolving."
The team plans to explore other trade instruments.
