DBS Utilizes Permissioned Blockchain For Efficient Grant Disbursements

DBS Bank (NASDAQ: DBSDY), based in Singapore, has successfully tested a programmable grant disbursement solution. This solution utilizes the bank’s permissioned blockchain to enhance governance and efficiency in government payouts.

DBS integrated the qualifying conditions for the grant into smart contracts on its permissioned blockchain. These contracts automatically trigger money transfers to the 27 local fintech firms that met the specified conditions.

The Pilot Demonstrates Efficient Grant Disbursement with Enhanced Governance

DBS stated in a press release that the pilot showcases how government agencies can use this solution to execute disbursements more efficiently, with improved governance controls and a better user experience. The bank also noted that the solution could enable businesses to access government cash payouts more quickly.

The pilot was launched by the Singapore Fintech Association (SFA), a non-profit organization, cross-industry that fosters partnerships among various stakeholders. It was conducted in partnership with a statutory board under the Ministry of Trade and Industry of the Singaporean government, Enterprise Singapore (EnterpriseSG).

Government agencies like EnterpriseSG, along with intermediaries such as the SFA, can use DBS’ permissioned blockchain to establish and program conditions for grant disbursements. When smart contracts confirm that these conditions are met, the grants are automatically distributed as cash to the receiver.

DBS said this approach improves governance control and minimizes the need for manual cash processing by intermediaries, allowing businesses to receive government payouts more quickly. Additionally, the bank’s permissioned blockchain offers full visibility into the entire disbursement process, enhancing transparency and enabling organizations to achieve greater efficiency in reconciliation and reporting.

Singapore’s DBS Aims To Contribute To The Broader Goals Of Project Orchid

The pilot took place during the Singapore Fintech Festival 2023 and was based on DBS’s experience with Purpose-Bound Money (PBM). This innovation from Singapore’s central bank and financial regulatory authority, the Monetary Authority of Singapore allows funds to be allocated for a specific need without the need to program the money itself.

DBS has joined the MAS-led Project Orchid, a multi-year effort to explore uses for Purpose-Bound Money (PBM) and the digital Singapore dollar. According to DBS, the next phase will work on growing PBM uses with EnterpriseSG and other government groups.

Han Kwee Juan, DBS Singapore’s country head, talked about the importance of the recent successful pilot. He said this programmable grant disbursement pilot introduces a new payment instrument that builds on the organization’s Purpose-Bound Money pilot experiences. He added that this represents a significant step forward in the industrialization of blockchain technology.