Hitachi, BTMU test blockchain cheque digitalisation in Singapore

by

29 August 2016

Hitachi and the Bank of Tokyo-Mitsubishi UFJ (BTMU) have started Proof of Concept (PoC) testing for using blockchain technology for digitalisation of cheques in Singapore.

The system, developed by Hitachi and BTMU, uses blockchain infrastructure for issuing, transferring and collecting electronic cheques. BTMU issues and settles cheques while Hitachi Group companies in Singapore receive the electronic cheques and deposit the funds, according to the report.

Hitachi partnership with BTMU comes after the recent release of Monetary Authority of Singapore’s consultation paper on proposed guidelines for a regulatory sandbox framework to advance FinTech services.

According to Hitachi and BTMU, blockchain technology makes it difficult to tamper the data while sharing data among multiple computers over networks. The digitalisation of cheques is expected to automate the workloads of intermediaries for cheques in financial institutions, to avoid tampering and to speed up cheque payments.

Both companies aim to increase efforts towards putting blockchain technology into practical use. The companies said the PoC testing will allow them to identify issues from various perspectives such as technology, security, operation, and legal perspectives.

Blockchain technology is expected to reduce system investments and provide reliable and convenient financial services, according to Hitachi and BTMU. In addition, similar approaches can be applied to payment and supply chain finance in non-financial sectors in the future, the companies said.