Singapore Consortium to Deliver the World’s First Blockchain Application For Trade Finance

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The Infocomm Development Authority of Singapore, DBS Bank and the Standard Chartered Bank have successfully completed a proof of concept (PoC) delivering the world’s first application of Blockchain technology designed to enhance the overall security of trade finance invoicing. Leveraging distributed ledger technology, the initiative will reduce risk around duplicate invoice financing for banks while preserving client confidentiality.

Gautam Jain, Global Head, Digitisation and Client Access, Transaction Banking, Standard Chartered, said:

“This success lays the foundation for harnessing technology to achieve greater goals in the banking industry. As the world’s leading trade finance Bank, we continue to innovate and develop solutions to solve real world issues and more importantly contribute to the overall digitisation of trade and trade finance. We will continue to look at ways to collaborate and contribute to the overall growth of the industry.”

The PoC marks an important milestone in the digitisation journey of trade finance and the revival of global trade. With enhanced security brought into the overall process, it reduces the systemic capital risks arising from duplicate invoices between lenders in a market. This creates a more conducive trading environment which in turn should encourage more trading activities using invoice financing.

Lum Yin Fong, Global Head, Client Management and Implementation, Global Transaction Services, DBS Bank, said:

“DBS is committed to innovating and shaping the future of banking to make banking easier and more seamless for our customers. This cuts across our different businesses and this proof of concept is another important milestone for the franchise. Trade finance is traditionally a paper-intensive process but with the use of distributed ledger technology, we can now digitise and authenticate records. This could revolutionise and transform trade operations, enhancing risk mitigation and creating more efficient processes for both corporates and banks.”

The initiative allows banks to convert invoices into digital assets on a distributed ledger. This gives the participants the ability to access a single source of information for the status of invoices seeking financing across all the participating banks while preserving client and commercial confidentiality. This is done by utilising distributed ledger technology as a means to prevent duplicate financing of the same invoice by different banks. Further, the initiative is envisaged to be an open ecosystem where neutral third parties can participate and verify the authenticity of the related trade documents being financed; further reducing the risk of financing duplicate invoices.

Khoong Hock Yun, Assistant Chief Executive, Development Group, IDA, said:

“As we build Singapore into a Smart Nation, we are also working closely with the financial sector to enable innovations that can help increase Singapore’s competitiveness as a global trading hub. 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.”

Jacqueline Loh, Deputy Managing Director, Development and International, FinTech and Innovation Group, MAS, said:

“Given Singapore’s role as a leading global trade finance and fintech centre, banks based here are well positioned to twin these two strengths to improve efficiency and strengthen risk management. This POC demonstrates the innovative spirit of Singapore’s Smart Financial Centre to leverage distributed ledger technology to support economic trade – which is the lifeblood of Asia’s economy.”

In the next phase of the project, the working team will be looking at widening the participation to include other industry stakeholders, including government agencies such as Singapore Customs and other banks based in Singapore, to join as partners and contribute to the commercial adoption of this initiative.

About Richard Kastelein

Founder of industry publication Blockchain News, partner at ICO services collective CryptoAsset Design Group (helped raise over $200m+), director of education company Blockchain Partners (Oracle Partner) and ICO event organiser at leading industry event  CryptoFinancing (first ICO event in Europe) - Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur. He sits on the advisory boards of half a dozen Blockchain startups and has written over 1200 articles on Blockchain technology and startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat.
 
Kastelein has spoken (keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London, Manchester, Minsk, Nairobi, Nanchang, San Mateo, Shanghai,Tel Aviv and Venice. His network is global and extensive.
 
He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He's written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com and his work and ideas have been translated into Dutch, Greek, Polish, German and French.
 
A journalist by trade, an entrepreneur and adventurer at heart, Kastelein's professional career has ranged from political publishing to TV technology, boatbuilding to judging startups, skippering yachts to marketing and more as he's travelled for nearly 30 years as a Canadian expatriate living around the world.
 
In his 20s, he sailed around the world on small yachts and wrote a series of travel articles called, "The Hitchhiker's Guide to the Seas' travelling by hitching rides on yachts (1989) in major travel and yachting publications. He currently lives in Groningen, Netherlands where he's raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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