DBS Bank has launched a pilot project to use blockchain technology for government grant disbursements in Singapore.
The bank will collaborate with Enterprise Singapore (EnterpriseSG) and the Singapore Fintech Association (SFA) as part of the project, according to a report from Fintech News.
The goal is to explore the potential of programmable grant disbursements to improve the efficiency, governance, and user experience.
Government Funds With Predetermined Conditions
The project utilizes a protocol known as Purpose-Bound Money (PBM), which ensures that funds are only released when predetermined conditions are met.
These conditions are verified through smart contracts, enabling automatic disbursements to the beneficiaries.
The system not only speeds up the distribution process but also reduces the need for manual oversight, thereby increasing the efficiency of fund allocation.
The pilot was conducted during the Singapore Fintech Festival 2023, where 27 local fintech companies, including notable names like Advance Intelligence, Aspire, and Experian Singapore, participated.
Using DBS’s permissioned blockchain, the process ensured that only authorized recipients received the grants once the specified criteria were fulfilled.
“Smart contract technology automates and streamlines grant disbursements for government agencies to enable faster, more secure disbursements and payments,” Han Kwee Juan, Country Head of DBS Singapore, said.
DBS’s involvement in this project is an extension of its participation in Project Orchid, a multi-year initiative led by the Monetary Authority of Singapore (MAS) aimed at developing the infrastructure for a digital Singapore dollar.
The bank plans to explore additional applications of programmable disbursements in collaboration with other government agencies as part of this broader effort.
Shadab Taiyabi, President of the Singapore Fintech Association, said that the solution is designed to help local companies receive government payouts more quickly.
“SFA will continue to support collaborations between the public and private sectors in solutions such as programmable grant disbursements as Singapore advances towards its Smart Nation objectives,” he added.
DBS Introduces Blockchain-Powered Treasury Tokens
Earlier this month, DBS Bank partnered with digital payment provider Ant International to launch a blockchain-based treasury and liquidity management solution.
The DBS Treasury Tokens, which are set to be utilized by Ant International, operate on DBS’s permissioned blockchain.
This blockchain is specifically designed to cater to DBS entities across various markets, allowing for instant and multicurrency treasury and liquidity management.
DBS has built its blockchain to be compatible with the Ethereum Virtual Machine (EVM), a widely used framework that enables the execution of smart contracts.
Moreover, DBS’s blockchain has been integrated with Ant International’s treasury management platform, Whale.
The integration is expected to significantly improve the management of intragroup liquidity, providing uninterrupted and optimized workflow and visibility for Ant International.
These initiatives are part of DBS’s broader exploration into the benefits of tokenization.
The bank has applied knowledge gained from its participation in the Monetary Authority of Singapore’s (MAS) Project Orchid and Project Guardian, both of which are focused on testing tokenization’s potential in financial services.
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