Singapore banks have teamed up to develop its own blockchain-powered digital trade registry serving as central databases to access trade transaction records.
The trade registry platform integrates blockchain technology to drive transparency, elimination of trade frauds, including duplicate financial transactions.
Led by banking giants such as DBS Bank and Standard Chartered, the program is supported by 12 major banks of Singapore, including ABN AMRO, ANZ, Deutsche Bank, ICICI, OCBC, and UOB.
In a statement on Tuesday, DBS bank said Singapore's blockchain startup, DLTLedgers will develop the digital trade registry platform.
Meanwhile, the government of Singapore has set up an investment of more than SG$500 million ($352.49 million) to facilitate local businesses and promote digital transformation. The government has focussed on the adoption of e-payments, e-invoices, and other innovative tools of the digital landscape.
The Singapore bank along with Standard Chartered has worked for almost three months to build a proof-of-concept for the digital registry. Both the banks hope that the new digital registry nurtures an ethical lending practice and improves transparency during a commodity trade.
DBS Bank adds: "It aims to be an industry utility by serving as a secure central database for the banking industry to access records of trade transactions financed across banks in Singapore. This mitigates against duplicate financing from different bank lenders for the same trade inventory, leading to greater trust and confidence among banks and traders alike."
Currently, banks conduct validations within a single customer entity or across their own networks of banking while having no clue what the other banks must have financed or if any payment obligations are being undertaken against.
DBS says a digital registry can help here by facilitating collaborations between the agents of government and market players. With the completion of the proof-of-concept, DBS will work with Standard Chartered and ABS to implement the trade registry, initially in Singapore, and at a later stage globally. Meanwhile, the ABS will also manage the trade registry while being supported by its committee of ABS Council member banks.
Lastly, three working bank groups will be set up to lead on governance, technical, and business development. All the banks would be invited to join the digital registry as members.