DBS to Test Digital Currency With Instant Settlement in Singapore
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DBS to Test Digital Currency With Instant Settlement in Singapore

The largest bank in Singapore is partnering with a government tech experimental team.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Singaporean financial services firm DBS is teaming up with Open Government Products, an experimental team of the Government Technology Agency of Singapore, to roll out a live pilot for the launch of “purpose-bound money-based vouchers.” The vouchers, issued using blockchain-powered tokenized Singapore dollars, could particularly benefit SMEs and retail shopfronts.

DBS and OPG to Enable Programmable Digital Singapore Dollar

DBS, the largest bank in Singapore, announced it is going into a partnership with Open Government Products (OPG), an experimental tech division of Singapore’s government, to launch a live pilot that will enable the issuance of “purpose-bound money-based (PBM) vouchers.” The vouchers will be issued through the use of tokenized Singapore dollars (SGD) “to facilitate “real-world” live transactions with selected merchants,” DBS said in a press release.

The live pilot represents a part of a broader initiative, Project Orchid, backed by Singapore’s central bank, which seeks to create a programmable digital Singapore dollar (DSGD). Ultimately, DBS will launch DSGDs while OPG will be responsible for enabling smart contract features.

This way, issuers will be able to program and self-execute the distribution and usage of PBM vouchers to the recipients. According to DBS, small and medium-sized enterprises (SMEs) and retail shopfronts could particularly benefit from this initiative.

“For SMEs and businesses with retail shopfronts this means that they will be able to benefit from instant settlement, payments and collections with their banks when customers use digital vouchers. This will help time and resource-starved small businesses increase cashflow and save time on administrative backend tasks.“

DBS Introduces Singapore’s First Programmable Money Live Pilot For Government Vouchers

The move would significantly accelerate the processing time before businesses receive money, a process that currently takes up to two days. This is because current vouchers, even though they are digital, involve some sort of backend administration that slows down the process.

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DBS Postpones Launch of Retail Trading Desk

The plan to launch PBM vouchers comes several months after DBS said it could launch a retail crypto trading desk by the end of 2022. But in April, the bank said it wants to focus on providing crypto services to accredited institutional investors and would look at a retail trading desk as it is “taking a bit longer than expected.”

Singapore has been one of the most crypto-friendly countries in the world and has been a fintech hub for a while. However, even the city-state tightened crypto regulations earlier this year following the crash of UST and LUNA, which sent shockwaves through the industry.

Last week, the Monetary Authority of Singapore, the country’s central bank, made several new proposals to further tighten regulations for retail crypto traders. Primarily, the central bank proposed banning retail users from debt-financed and leveraged crypto trading, as well as trading via credit cards.

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