Several banks in Singapore are teaming up to create a digital trade registry to serve as a central database for accessing records of trade transactions. The registry is powered by blockchain and geared towards promoting transparency and reducing risks.
The consortium is composed of 14 banks, led by DBS Bank and Standard Chartered. According to the DBS Bank report, the other 12 banks supporting the initiative include OCBC, ANZ, ICICI, Deutsche Bank, ABN AMRO, and UOB. These banks have come together to promote transparency and improve lending practices in commodity trading.
The development of this platform will be handled by a blockchain technology startup. They will be in charge of the development of Trade Finance Registry (TFR), and Proof-of-concept (POC). The project is endorsed by The Association Banks of Singapore (ABS) and gains support from the Enterprise Singapore (ESG).
The digital registry will be powered by blockchain technology and would improve transparency in trading and also eliminate risks related to trade fraud. These risks may include duplicate financing, which can be averted since the digital registry will become a central database through which Banks can access transaction records.
The TFR POC will serve as an industry utility because through its development, the banking industry can monitor the trade transaction records that were financed in several Singapore banks. The issue of multiple financing by different bank lenders for the same trade inventory can be reduced through this assessment system. This would lead to better confidence and transparency among traders and banks alike.
Sriram Muthukrishnan, global head of trade product management at DBS Bank, said, “Building greater resilience in the industry ecosystem is even more important today as businesses and economies continue to deal with the impact of prolonged trade disruptions.”
He also claims that the Trade Finance Registry will mark an important step towards fostering greater transparency through collaboration and strengthening lending practices in Singapore’s banking sector while ensuring a secure operating environment for the industry.
Muthukrishnan also pointed out that the success of the project within few months reveals that there is a great force of achievement when industry members come together to co-create solutions.
Watch the CoinGeek Live 2020 Day 1 panel, The Future of Banking, Financial Products & Blockchain.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
