DBS on Tuesday (Aug 13) announced the pilot launch of its blockchain-powered treasury tokens, in a tie-up with digital payment and financial services provider Ant International.
The treasury tokens, enabled by DBS’ permissioned blockchain, is integrated with the bank’s core payments engine and uses smart contracts and tokensisation to improve banking efficiencies.
Ant International, through the collaboration, will be able to use the bank’s permissioned blockchain for its entities across different markets.
It will also be integrated with Ant International’s Whale platform – a treasury management solution – allowing the digital payment provider to manage its intra-group liquidity on a 24/7 basis.
This comes as the treasury needs of businesses have evolved to meet the rise of e-commerce and on-demand services on a round-the-clock basis, DBS’ group head of global transaction services Lim Soon Chong noted.
The tokens could reduce the time taken to settle intra-group transactions from days to seconds, making treasury and liquidity management more efficient, especially for large companies that need to manage payments, collections, funding needs and cash positions across time zones and currencies.
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The blockchain technology – along with advanced encryption and artificial intelligence – will also improve the transparency of fund movements between different bank accounts, boosting visibility, predictability and control over a company’s cash position.
Ant International’s head of platform tech Kelvin Li said: “This milestone with DBS is an important step forward in addressing challenges like reducing costs and transaction risks for cross-border payments.”
Blockchain technology has already been successfully deployed on the company’s Whale platform for instant tax refund services and cross-border payments for small and medium enterprises.
The permissioned blockchain, which is compatible with the Ethereum virtual machine, could make up the building block for new capabilities in traditional banking services such as “programmable, fractionalised and atomic value transfer”, said Lim.
The pilot launch of DBS treasury tokens hails from the banks’ participation in the Monetary Authority of Singapore-led Project Orchid and Project Guardian to test the benefits of tokenisation.
Project Guardian is a collaborative initiative between policymakers and the financial industry to enhance liquidity and efficiency of financial markets through asset tokenisation. The solution is one of the industry applications tested under the project.
Since 2016, the bank has piloted transactions involving atomic settlement use cases with tokenised bank deposits and securities, among others.
