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DBS Bank has launched a blockchain-based solution designed to streamline the disbursement of government grants, building on its involvement in Project Orchid—a Monetary Authority of Singapore (MAS) initiative focused on exploring the benefits of tokenization.
In this pilot program, DBS Bank partnered with Enterprise Singapore (ESG), a statutory board under the Ministry of Trade and Industry, and the Singapore Fintech Association (SFA). The collaboration aimed to demonstrate the efficiency and effectiveness of using blockchain technology to manage and distribute government grants.
Utilizing Smart Contracts for Efficient Disbursement
The pilot involved the Singapore Fintech Association disbursing government grants to 27 of its members. DBS Bank utilized smart contracts on its permissioned blockchain to facilitate these transactions. The pilot demonstrated how blockchain-based programmable grants could significantly improve efficiency, enhance governance, and expedite access to government funding for businesses.
The permissioned blockchain allows ESG and its intermediaries, such as the SFA, to set the conditions for grant programs and oversee the disbursement process. Once the specified business conditions are met, smart contracts automatically verify compliance and trigger the disbursement of funds to the eligible recipients.
Enhanced Governance and Transparency
According to DBS Bank, the blockchain solution not only improves governance control by reducing the need for manual processing but also ensures faster cash payouts to businesses. The permissioned blockchain provides full visibility of the entire process, enhancing transparency for all parties involved.
Permissioned blockchains, unlike fully decentralized networks, have an access control layer that restricts participants’ authority to pre-approved levels, ensuring greater control and security while leveraging distributed ledger technology.
Building on Project Orchid and Beyond
The pilot project is a direct application of insights gained from DBS Bank’s participation in Project Orchid, an MAS-led initiative that tests the advantages of tokenization with local stakeholders. DBS Bank has been actively involved in various blockchain initiatives, including a previous collaboration with digital payment provider Ant International. This partnership focused on creating a blockchain-based treasury and liquidity management solution, which led to the launch of DBS’s treasury tokens within its Ethereum Virtual Machine (EVM) permissioned blockchain.
The programmable grants pilot reflects DBS Bank’s ongoing commitment to leveraging blockchain technology to enhance financial processes, drawing on experiences from other MAS-led projects like Project Guardian, which also explores the potential of digital currencies.
DBS Bank’s efforts demonstrate the growing role of blockchain in transforming government operations and financial services, positioning the bank at the forefront of innovation in the fintech sector.
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