A kit if changes are happening behind the scenes of the financial industry. Utilizing blockchain technology is now the top priority for many banks. DBS is partnering SC to continue the development of a blockchain-based trade finance registry.
The Power of Blockchain in Finance
Finding the right use case for blockchain technology in the financial sector is never an easy feat. Several efforts have been launched, yet most of them remain limited in appeal in functionality. DBS and Standard Chartered have formed their own workgroup. It includes 12 other banks, all of whom helped create a proof of concept pertaining to digital trade finance.
This venture has received the support of Enterprise Singapore and The Association Banks of Singapore. Through the proof of concept, it will become apparent if blockchain offers advantages in trade finance. The to-be-built registry will potentially replace the current database system, yet remain centralized in nature. It will only be used within Singapore in the initial stages.
Contrary to some expectations, dtltledgers will provide the technology to build this new trade finance registry. DBS and Standard chartered have put the finishing touches on this venture. Of the 12 banks participating in this venture, Deutsche Bank, ANZ, Lloyds, and Rabobank are the “big names”.
Now that the proof of concept has been completed, it will be put to the test in the real world. ABS will implement it as a utility to enhance trade financing practices within Singapore. If successful, this project will be launched globally to cover major trade corridors.
A Viable or Wasted Effort?
While the finance trade registry concept has a lot of merit, some questions remain. Using a blockchain to act as a centralized “database” for record keeping isn’t ideal. In fact, blockchains are, at their core, designed to decentralize this entire process. This particular venture aims to keep the same people in control, but through the guise of innovative technology.
That doesn’t mean this concept can’t have merit. For local use within Singapore, it should be sufficient in the short-term. However, addressing the centralized nature may prove worthwhile. Whether the banks ever want to tap into that aspect of blockchain, remains to be determined.
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