DBS introduces Singapore’s first programmable money live pilot for government vouchers
Businesses to benefit from instant settlement, easing cashflow and reducing resources needed for administrative tasks
Forms part of Project Orchid efforts to develop infrastructure to enable the issuance of a digital Singapore dollar
By leveraging blockchain technology, PBM vouchers will be created using DSGD issued by DBS, with smart contract capabilities enabled by OGP. This will enable issuers to program and self-execute the distribution and usage of the voucher to designated recipients.
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. The current process involves one to two days of processing time before merchants actually see the money credited into their bank accounts.
DBS believes that its live pilot with Open Government Products will be useful in scenarios such as the Community Development Council voucher scheme where Singaporean households receive CDC vouchers to help cope with rising inflation and cost of living. Majority of these vouchers are now digital vouchers but involve some backend administration for the merchant. However, with PBM vouchers, merchants will be able to be paid instantly, doing away with backend reconciliation, increasing productivity and efficiency.
By starting the pilot with the F&B industry in Singapore, in future, PBM vouchers issued using tokenised SGD could benefit Singapore’s 28,000 coffee shops, hawker centres and restaurants[1].
Shee Tse Koon, Singapore Country Head of DBS, said, "Many businesses we speak to, of all sizes and even non-governmental organisations (NGOs), want to urgently realise productivity gains from digitalisation but are unsure of how to do so. The live pilot demonstrates the feasibility of programmable money to foster an even more efficient, trustworthy and robust payment system, especially for time and resource starved businesses. This solution could help businesses and NGOs leapfrog into the future of money. "Purpose bound money" will be immensely transformative especially when governments, businesses and individuals come together with a collective vision to adopt the use of digital money on inter-connected networks to realise a fully transparent and efficient global financial infrastructure for payments. It also further reinforces how blockchain technology can be the bedrock to build the next generation of payments and settlement infrastructure on – not only because of its immutability and accessibility, but also for its programmability by leveraging smart contracts."
Li Hongyi, Director of Open Government Products, said, "Through piloting a "purpose bound money", we demonstrate how we can make it easier for the Government to implement voucher programmes through smart contracts. We want to test how we can potentially make settlement faster and less costly, and reduce the reconciliation effort of banks, voucher issuers and merchants. If verified to be helpful, perhaps such a model - in which merchants receive DSGD immediately with each voucher redemption instead of a voucher (and needing to be reimbursed separately) – could be a model extensible to future other government programmes. We intend to work more closely with industry partners such as DBS to test such a concept, and will share our technical documentation more widely."
The live pilot will involve up to 1,000 selected consumers and six merchants, including popular F&B outlets such as Nanyang Old Coffee, Sarnies, Pickleville, The Working Class and The Three Anchovies at the central district for a duration of four weeks starting from 27 October 2022.
DBS foresees that programmable money will also be useful in the area of purpose-bound donations, sustainability financing, and facilitating the payment of multi-step conditional processes such as conveyancing payments in property transactions.
DBS and OGP have also contributed to a MAS-led industry white paper[2] issued earlier today that introduces the concept of purpose-bound money and the potential benefits of programmable digital currency through various use cases.
For corporates and individuals who would like to experience the benefits of using a PBM voucher, they can visit the Project Orchid Booth at the Singapore FinTech Festival 2022 located at the Expo (Hall 3) from 2 to 4 November 2022[3]. Visitors will be able to use the voucher to purchase Japanese cuisine served by Zenryoku Shokudo within the MAS booth.Pushing the boundaries of digital payments with blockchain
DBS has worked on several public and private sector blockchain initiatives aimed at transforming the future of payments over the years.
From co-founding Partior in 2021, to leading experiments with like-minded industry players on MAS-led Project Orchid and Project Guardian this year, DBS has been consistently experimenting and leveraging the power of emerging technologies to create a more efficient and safer payments landscape.
The bank was also part of Project Ubin, an industry initiative by the Monetary Authority of Singapore to explore the application of blockchain technology involving multi-currency payments and settlements since its inception in 2016. Project Ubin was the launch pad for the development of Partior.
[1] Source: Euromonitor, from DBS Group Research report - https://www.dbs.com/aics/pdfController.page?pdfpath=/content/article/pdf/AIO/102019/191022_insights_fnb.pdf
[2] https://www.mas.gov.sg/publications/monographs-or-information-paper/2022/project-orchid-whitepaper
[3] The PBM vouchers will be given out on a first-come-first-served basis
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About DBS
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Global Finance, “World’s Best Bank” by Euromoney and “Global Bank of the Year” by The Banker. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney and the world’s “Most Innovative in Digital Banking” by The Banker. In addition, DBS has been accorded the “Safest Bank in Asia“ award by Global Finance for 14 consecutive years from 2009 to 2022.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, as it banks the Asian way. Through the DBS Foundation, the bank creates impact beyond banking by supporting social enterprises: businesses with a double bottom-line of profit and social and/or environmental impact. DBS Foundation also gives back to society in various ways, including equipping communities with future-ready skills and building food resilience.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. For more information, please visit www.dbs.com.
About Open Government Products
OGP is a modern tech team within the Singapore Government that builds technology for the public good. Our role is to make the government better by being a space where it can experiment with new tech practices, including new technologies, management techniques, corporate systems, and even cultural norms. Each year, we run our Hack for Public Good where teams at OGP identify problems and build solutions from the ground up. Our end goal is to shape Singapore into a model of how governments can use technology to improve the public good. We also hope to inspire and influence governments around the world by sharing our vision of what Government could be. Learn more about us: www.open.gov.sg
