DBS Bank has announced a collaboration with Enterprise Singapore (ESG). The objective is to establish a project that utilizes the capabilities of blockchain and smart contract technologies to disburse government grants to eligible participants. It essentially streamlines the process by eliminating third parties. Smart contracts automatically execute transactions after verifying the fulfillment of conditions.
The Singapore Fintech Association, or SFA, has so far disbursed grants to 27 members. Intermediaries continue to establish conditions; however, smart contracts serve as the ultimate verification mechanism. The conditions set determine who is eligible for the grant and who does not. Recipients have to fulfill conditions to get the final approval.
In addition to streamlining, the mechanism guarantees prompt payouts to recipients and enhances government control.
It is a transparent process, and most of the details can be seen by organizations that are involved in the process. This feature is offered through the bank’s permissioned blockchain. However, it only grants access to a pre-approved level of authority. Blockchains are partially decentralized, allowing participants who have been pre-approved by authorities to access control layers.
The development of the grant pilot follows the successful output of Project Orchid. It is a digital current by MAS, the Monetary Authority of Singapore. The design aims to evaluate the advantages of tokenization in collaboration with local stakeholders.
This is not the first partnership for DBS. It previously collaborated with Ant International to create a blockchain-based Treasury & Liquidity Management solution. DBS has already launched a Treasury token that will be used for two main purposes: Treasury management and liquidity.
The Hong Kong Monetary Authority earlier fined DBS Bank $1.3 million for breaching money-laundering law. The authority imposed the fine, stating that DBS failed to monitor business relationships and undertake due diligence in situations that have high risks.
According to the most recent reports, MAS refused to extend a pause on DBS’s non-essential activity. To restore the resilience of digital services in the banking system, MAS halted these services from November 1, 2023, to April 30, 2024. It includes two aspects, namely acquiring new businesses and modifying information technology. The development dates back to the end of April, and it is reasonable to assume that DBS has removed restrictions to explore every possible territory.
DBS Bank is planning to continue its blockchain-based grants program in association with Enterprise Singapore, or ESG. Disbursement of government grants has seen efficient results with a streamlined process that almost removes intermediaries from the last point of the process. They are only responsible for keeping track of the requirements that participants must meet in order to be eligible for the program.
It remains transparent to share details with participating organizations. As the mechanism spends some time in the market, more details are likely to become public.
Source: https://www.cryptonewsz.com/dbs-bank-simplifies-govt-grant-distribution-with-blockchain-technology/