Singapore banks to develop digital trade registry for better transparency

To be powered by blockchain technology, the digital registry aims to be a central database for banks to access records of trade transactions and reduce risks of duplicate financing.

Banks in Singapore are teaming up to develop a digital trade finance registry that will serve as a central database from which they can access records of trade transactions. To be built on blockchain technology, the platform aims to drive greater transparency and reduce the risk of trade fraud, including duplicate financing. 

Led by DBS Bank and Standard Chartered, the initiative is supported by 12 other banks including ABN AMRO, ANZ, Deutsche Bank, ICICI, OCBC, and UOB. Singapore-based blockchain technology startup DLTLedgers has been roped in to develop the platform, said DBS in a statement Tuesday.

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The Singapore bank said it, alongside Standard Chartered, have worked for three months to establish the proof-of-concept for the digital registry that they hoped would enhance lending practices and improve transparency in commodity trade. 

"[It] aims to be an industry utility by serving as a secure central database for the banking industry to access records of trade transactions financed across banks in Singapore. This mitigates against duplicate financing from different bank lenders for the same trade inventory, leading to greater trust and confidence among banks and traders alike," DBS said.

The initiative was supported by Enterprise Singapore and endorsed by The Association Banks of Singapore (ABS).

Without a digital registry, banks currently need to conduct validations within a single customer entity or across their own banking network, with no view of what other banks have financed or undertaken payment obligations against. The digital registry would plug this gap by facilitating collaboration across market players and government agencies, DBS said. 

Enterprise Singapore's assistant CEO Satvinder Singh noted that the development of the "neutral and secure platform" would ease the flow of information between banks and boost their risk management capabilities, driving greater confidence in the finance and trade sectors. 

After the proof-of-concept was completed, DBS said it would work with Standard Chartered and ABS to deploy the digital registry in Singapore before expanding it at a later stage to cover "major trade corridors" globally.

The ABS would also manage the digital registry, supported by a committee comprising ABS Council member banks. In addition, three working groups of banks would be set up to jointly lead the governance, technical development, and business scope of the project. All banks would be invited to join the registry as members. 

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