Hitachi and the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) have begun Proof of Concept (PoC) testing for using blockchain technology for digitalisation of checks in the Republic of Singapore.
Blockchain technology makes it difficult to tamper the data while enabling ease of sharing the data related to processes among multiple computers over networks.
Hitachi and BTMU developed a system in which blockchain infrastructure is used for issuing, transferring and collecting electronic checks.
This system allows BTMU to issue and settle checks and some of Hitachi Group companies in Singapore leverage it to receive the electronic check as well as deposit funds.
The PoC testing will allow Hitachi and BTMU to identify issues from various perspectives and realise new FinTech services including digitalisation of checks.
Increased adoption of technology
The past few years have seen an increase of various efforts towards providing new financial services that utilise blockchain technology and making financial services more efficient.
The Monetary Authority of Singapore has released a consultation paper on proposed guidelines for a regulatory sandbox framework to facilitate the advancement of FinTech services.
This PoC testing will leverage the regulatory sandbox framework to identify issues for practical use, issuing and settling check by blockchain technology on a system developed by Hitachi Asia and BTMU.
The digitalisation of checks will automate the workloads of intermediaries for checks in financial institutions, to avoid tampering and to speed up settling checks.
Similar approaches can be applied to payment and supply chain finance in non-financial sectors in the future.
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