The Bank of Tokyo-Mitsubishi UFJ (BTMU) has paired up with Hitachi to work on proof-of-concept testing for use of blockchain technology for digitising cheques in Singapore.
The two entities have developed a system for using blockchain for issuing, transfer and collection of electronic cheques. BTMU issues and settles the cheques, while Hitachi Group companies in Singapore receive them and deposit the funds.
According to Hitachi and BTMU, the system will allow them to identify issues from various perspectives. They will look at technology, security, operations and legal issues, and other potential issues for practical use.
Automating the workload of intermediaries for cheques in financial institutions is intended to help avoid tampering in the process, while also speeding up the process.
Similar approaches could then potentially be applied to payment and supply-chain finance in non-financial sectors in the future.
The partnership follows the release of the Monetary Authority of Singapore’s consultation paper on its proposed fintech regulatory sandbox guidelines for facilitating the advancement of fintech, released in June.
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