Singaporean bank DBS has announced the pilot launch of DBS Treasury Tokens, a next-generation treasury and liquidity management solution, in collaboration with fintech firm Ant International.
DBS said in a statement on Tuesday that Ant International will be able to use the digital form factor to achieve instant, multi-currency treasury and liquidity management on DBS’ permissioned blockchain for their entities across multiple markets.
In addition, DBS’ permissioned blockchain is integrated with Ant International’s Whale platform, enabling Ant International to seamlessly manage their intragroup liquidity on a 24/7 basis, thereby optimizing workflow and visibility.
It is noted that Ant International’s Whale platform is its next-generation treasury management solution that utilises blockchain technology, advanced encryption and artificial intelligence to improve the efficiency and transparency of fund movements between bank accounts.
“This milestone with DBS is an important step forward in addressing challenges like reducing costs and transaction risks for cross-border payments,
“We have already seen successful use cases on our Whale platform in areas such as instant tax refund services and small and medium-sized enterprise (SME) cross-border payments, and we will continue working together with industry partners and leveraging blockchain technology to enable more open and inclusive cross-border payments,” said Kelvin Li, Head of Platform Tech, Ant International.
According to the statement, large corporates like Ant International which operate several entities across multiple markets need to manage payments, collections, funding needs and cash positions across time-zones and currencies.
DBS Treasury Tokens enables Ant International to reduce the settlement of intra-group transactions from potentially days to seconds.
This optimizes intra-group liquidity and working capital, providing corporate treasurers with greater visibility, predictability and control over the entire group’s cash position.
“This new capability comes at a time when the treasury needs of businesses are evolving to meet the rise of e-commerce and on-demand services on a 24/7 basis,” said Lim Soon Chong, Group Head of Global Transaction Services, DBS Bank.
“DBS Treasury Tokens and our partnership with Ant International demonstrates how corporates can seize such opportunities with full confidence that their liquidity management capabilities can scale in tandem,
“DBS’ permissioned blockchain also forms the building block for new efficiencies and capabilities in traditional banking services, such as programmable, fractionalized and atomic value transfer,” he added.
It is noted that DBS’ permissioned blockchain is Ethereum virtual machine (EVM)-compatible and is integrated with its core payments engine.
This greatly enhances extensibility and interoperability with multiple industry payment infrastructures that DBS is involved in. This successful product launch by DBS demonstrates how established commercial banks and financial institutions can harness blockchain technology and smart contracts to deliver the next generation of banking services on a 24/7, atomic, and programmable basis.
DBS Treasury Tokens stems from the learnings and systems developed from the bank’s multi-year participation in the Monetary Authority of Singapore (MAS)-led Project Orchid and Project Guardian to test the benefits of tokenization.
The solution is one of the industry applications tested under Project Guardian.
Since 2016, the bank has piloted transactions involving Purpose Bound Money, institutional-grade financial protocols, as well as atomic settlement use cases with tokenized bank deposits and tokenized securities.
Ant International is also actively involved in Project Guardian, having developed a treasury management solution that will enable real-time multi-currency clearing and settlement, supporting over 40 currencies.
DBS is a leading financial services group in Asia with a presence in 19 markets.
Headquartered and listed in Singapore, the bank is operating in three key Asian regions: Greater China, Southeast Asia and South Asia.
The bank provides a full range of services in consumer, SME and corporate banking.
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