DBS Introduces Singapore’s First Programmable Money Live Pilot for Government Bonds


DBS today announced a partnership with Open Government Products (OGP) to launch a live pilot project where special-purpose monetary vouchers (PBM vouchers) are issued using tokenized SGDs to facilitate “real-world” live transactions with selected merchants. This is part of Project Orchid, an industry effort led by the Monetary Authority of Singapore (MAS), to develop the technology infrastructure and technical skills to enable a Programmable Digital Singapore Dollar (DSGD).

Leveraging blockchain technology, PBM vouchers will be created using DSGDs issued by DBS, with smart contract capabilities enabled by OGP. This will allow issuers to schedule and self-execute the distribution and redemption of the voucher to designated recipients.

For SMBs and businesses with retail storefronts, this means they will be able to enjoy instant settlement, payments and collections with their banks when customers redeem digital vouchers. It will help small businesses that are short on time and resources to increase their cash flow and save time on administrative tasks. The current process involves one to two days of processing time before merchants actually see the money credited to their bank accounts.

DBS believes its live pilot project with Open Government Products will be useful in scenarios such as the Community Development Council’s voucher scheme where Singaporean households receive CDC vouchers to help them cope with rising inflation and the Cost of life. The majority of these vouchers are now digital vouchers, but involve some backend administration for the merchant. However, with the right PBMs, merchants will be able to get paid instantly, eliminating backend matching, increasing productivity and efficiency.

By starting the pilot project with the F&B industry in Singapore, in the future, PBM vouchers issued using tokenized SGDs could benefit Singapore’s 28,000 cafes, hawker centers and restaurants.

Shee Tse Koon, Country Director of DBS in Singaporesaid, “Many companies we speak to, of all sizes and even non-governmental organizations (NGOs), urgently want to realize productivity gains through digitalization, but do not know how to do it. The live pilot demonstrates the feasibility of programmable money to foster an even more efficient, reliable and robust payment system, especially for businesses that are short on time and resources. This solution could help businesses and NGOs get started in the future of money. “Purpose Currency” will be hugely transformative, especially when governments, businesses and individuals come together with a collective vision to embrace the use of digital currency across interconnected networks to achieve a fully global financial infrastructure. transparent and efficient for payments. It also reinforces how blockchain technology can be the foundation on which to build the next generation of payment and settlement infrastructure – not only because of its immutability and accessibility, but also for its programmability by leveraging contracts. smart.

Li Hongyi, Director of Open Government Productssaid, “By piloting ‘money tied to a goal’, we demonstrate how we can facilitate government implementation of voucher programs through smart contracts. We want to test how we can potentially make settlement faster and less expensive. , and reduce the reconciliation effort of banks, voucher issuers and merchants If it proves useful, perhaps such a model – in which merchants receive DSGD immediately with each voucher exchange instead of a voucher (and to be redeemed separately) – could be a model that can be extended to other future government programs. We intend to work more closely with industry partners such as DBS to test such a concept, and will share our technical documentation more broadly.

The live pilot will involve up to 1,000 selected consumers and six traders including popular F&B outlets such as Nanyang Old Coffee, Sarnies, Pickleville, The Working Class and The Three Anchovies in the Central District for a duration of four weeks from October 27, 2022. .

DBS anticipates that programmable money will also be useful in the area of ​​purpose-linked donations, sustainable financing, and facilitating the payment of conditional multi-step processes such as property transfer payments in real estate transactions.

DBS and OGP also contributed to an industry white paper led by MAS, released earlier today, which introduces the concept of purpose-bound money and the potential benefits of programmable digital currency through various business cases. ‘use.

For businesses and individuals who want to experience the benefits of using a good PBM, they can visit the Project Orchid Booth at the Singapore FinTech Festival 2022 located at the Expo (Hall 3) from November 2-4, 2022. visitors can use the voucher to purchase Japanese cuisine served by Zenryoku Shokudo at the MAS stand.

Pushing the boundaries of digital payments with blockchain

DBS has worked on several public and private sector blockchain initiatives aimed at transforming the future of payments over the years.

From co-founding Partior in 2021 to leading experiments with like-minded industry players on Project Orchid and Project Guardian led by MAS this year, DBS has consistently experimented and harnessed the power of emerging technologies to create a more efficient and secure payments landscape. .

The bank was also part of Project Ubin, an industry initiative by the Monetary Authority of Singapore to explore the application of blockchain technology involving multi-currency payments and settlements since its inception in 2016. Project Ubin has been the ramp for Partior development launch.

About DBS

DBS is a leading financial services group in Asia, present in 18 markets. Headquartered and listed in Singapore, DBS is present in all three major Asian growth areas: Greater China, Southeast Asia and South Asia. The bank’s “AA-” and “Aa1” credit ratings are among the highest in the world.

DBS offers a full range of services in the area of ​​personal, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with its customers because it does its banking the Asian way. Through the DBS Foundation, the bank creates an impact beyond the bank by supporting social enterprises: enterprises with a double profit and social and/or environmental impact. The DBS Foundation also gives back to society in a variety of ways, including equipping communities with future-ready skills and building food resilience.

About Open Government Products

OGP is a modern technology team within the Singapore government that develops technology for the public good. Our role is to make government better by being a space where it can experiment with new technological practices, including new technologies, management techniques, business systems and even cultural norms. Every year we organize our Hacking for the public good where OGP teams identify problems and build solutions from scratch. Our end goal is to make Singapore a model of how governments can use technology to enhance the public good. We also hope to inspire and influence governments around the world by sharing our vision of what government could be.

picture by Christopher Theisinger on Unsplash

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