Singapore Banks Advance Blockchain-Based Payment Infrastructure
DBS, OCBC and UOB have completed live domestic Singapore dollar transactions using tokenised deposits on Swift’s blockchain-enabled ledger, marking a significant development in Singapore’s financial-market infrastructure and the broader adoption of blockchain technology in banking.
The transactions represent the first time the three Singapore-headquartered banks have executed live interbank transactions using tokenised deposits through Swift’s shared-ledger infrastructure. The milestone demonstrates how established financial institutions can collaborate to develop new forms of digital payment infrastructure while maintaining the security, trust and resilience associated with the traditional banking system.
The initiative also provides practical evidence of how shared-ledger technology could support always-on interbank payments, potentially enabling banks and their corporate clients to move funds outside conventional banking hours, including weekends and other periods when traditional payment systems may operate with limited availability.
Expanding the Role of Tokenised Deposits
Tokenised deposits are emerging as an important area of innovation in institutional banking. They represent deposits issued by regulated banks in digital form and can potentially be used to facilitate faster and more programmable transactions while remaining connected to the existing banking system.
The latest transactions by DBS, OCBC and UOB demonstrate how tokenised deposits could be used in real-world interbank payment environments rather than remaining limited to experimental or pilot projects.
For financial institutions, the ability to connect different tokenised deposit ecosystems is particularly important. Without interoperability, digital money issued by different banks or operating on separate platforms could remain confined to individual ecosystems.
Swift’s blockchain-enabled ledger is designed to address this challenge by providing a shared infrastructure through which participating banks can connect their digital-money systems.
The development could help establish common foundations for future digital payment networks and support greater interoperability between banks, currencies and financial-market infrastructures.
Moving Toward Always-On Payments
One of the most important potential benefits demonstrated by the initiative is the ability to support payments beyond traditional banking hours.
Modern businesses increasingly operate continuously across markets and time zones. Corporate treasury teams, financial institutions and multinational companies may need to make or receive payments outside conventional business hours, creating demand for payment systems that can operate around the clock.
Traditional financial infrastructure can involve processing windows, cut-off times and settlement schedules that may limit the ability to move funds immediately.
Shared-ledger technology and tokenised deposits could provide an alternative by allowing transactions to be processed continuously.
The live SGD transactions therefore offer an example of how digital financial infrastructure could support an always-on payment environment.
DBS said its pilots have demonstrated the potential for clients to conduct both U.S. dollar and Singapore dollar payments at any time, including weekends.
DBS Highlights Round-the-Clock Digital Payments
Rachel Chew, Chief Operating Officer and Co-Head of Digital Assets, Global Transaction Services at DBS, said the initiative reflects the changing requirements of businesses operating in a digital economy.
“In a digital economy, our clients’ businesses operate round the clock, and their money should too,” Chew said.
According to DBS, its work with tokenised deposits is aimed at helping institutions take advantage of digital-asset capabilities at scale.
The bank has been developing its digital-asset ecosystem since 2021 and has emphasized interoperability and common standards as important components of broader industry adoption.
Chew said DBS would continue working with partners OCBC to develop interoperability between different ecosystems and establish common standards.
Greater interoperability could help financial institutions move beyond isolated blockchain networks and toward payment environments in which digital money can operate across multiple platforms.
The objective is to create a more seamless transaction experience while preserving the institutional safeguards expected from regulated financial services.
OCBC Emphasizes Industry Collaboration
OCBC described the live SGD transactions as an important demonstration of what collaboration across the banking industry can achieve.
Carmen Chan, Deputy Head of Global Transaction Banking at OCBC, said the transactions demonstrate the potential value of bank-issued digital money and shared-ledger infrastructure.
“Singapore’s first live SGD interbank transactions enabled by bank-issued digital money demonstrate the value of industry collaboration in shaping the future of payments,” Chan said.
The bank views the initiative as an opportunity to understand how shared-ledger technology can create new payment capabilities for businesses while preserving the trust and resilience of the existing financial system.
OCBC has also completed a live U.S. dollar cross-border transaction through the initiative. The OCBC combination of domestic SGD activity and cross-border USD transactions highlights the potential
Source link: https://www.dbs.com
