Hitachi, Ltd. and the Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) has reported that they have started Proof of Concept (PoC) testing for using blockchain technology for digitalization of checks in the Republic of Singapore.
In this PoC testing, the companies are known to have communally developed a system in which blockchain infrastructure are used for issuing, transferring and collecting electronic checks.
Using the system, BTMU issues and settles checks and some of Hitachi Group companies in Singapore, receives the electronic check and deposits the funds.
Through the PoC testing, the companies are sought to identify issues from various perspectives such as technology, security, operation, and legal perspectives, and aim to realize new FinTech(2) services including digitalization of checks.
In recent years, various efforts towards providing new financial services that utilize blockchain technology and making financial services more efficient have been accelerated.
Blockchain is a technology which makes difficult to tamper the data, sharing the data related to processes among multiple computers over networks.
With applying blockchain technology, it is expected to reduce system investments and to realize providing reliable and convenient financial services.
The Monetary Authority of Singapore has recently released a consultation paper on proposed guidelines for a regulatory sandbox framework to facilitate the advancement of FinTech services.
With the framework, this PoC testing aims to identify issues for practical use, issuing and settling check by blockchain technology on a system developed by Hitachi Asia Ltd., the Asian regional headquarters of Hitachi, Ltd. and BTMU as one of the collaborative creations between Hitachi and BTMU in the Asian region.
The digitalization of checks makes it possible to automate the workloads of intermediaries for checks in financial institutions, to avoid tampering and to speed up settling checks. In addition, it is expected that similar approaches can be applied to payment and supply chain finance in non-financial sectors in the future.
Based on this PoC testing, Hitachi and BTMU will increase efforts towards putting blockchain technology into practical use, and will contribute towards the global expansion and evolution of financial services.