The Asia-Pacific region is a rising star in FinTech innovation, but this week, the blockchain spotlight landed on Singapore as more distributed ledger initiatives from the private and public sectors took major steps forward.
It’s no surprise, considering the Singapore FinTech Festival took place, acting as a global stage for blockchain innovators to strut their stuff. According to reports in Singapore Business Review, $2.71 billion was raised by investors for FinTechs in the final day of the FinTech Festival, with the majority of investors coming from Singapore itself. Nearly two-thirds of that funding will go toward blockchain startups, reports added.
The nation’s excitement over distributed ledger technology (DLT) cannot be ignored. In this week’s Blockchain Tracker, PYMNTS takes a look at some of the largest blockchain announcements made during the FinTech Festival, as collaboration between FinTechs, financial services giants and government entities show a clear faith not only in DLT, but in its potential to transform B2B trade.
The Singapore-Hong Kong Initiative
The Monetary Authority of Singapore (MAS) announced this week that its global trade connectivity network (GTCN) initiative, a joint project to streamline cross-border trade between the two nations, will debut in early 2019. The Monetary Authority said it expects about 20 global banks to join the partnership, which aims to develop a blockchain-based network to facilitate trade between Singapore and Hong Kong via the transmission of digital documents and data.
According to reports in the Business Times, Singapore’s central bank participated in a three-hour-long meeting late last week with Hong Kong to discuss the initiative, which has a lot of concerns to consider before the rollout. Reports said officials are looking particularly closely at data privacy and transaction secrecy, as well as regulators’ role in support of DLT overall.
The Singapore-Philippines Agreement
Hong Kong is far from the only market Philippines officials and innovators are looking to collaborate with when it comes to blockchain-based global trade. Singapore’s central bank also announced a new agreement with the central bank of the Philippines to explore how blockchain could facilitate international payments between their markets.
The “FinTech Cooperation Agreement” establishes a framework of collaboration between the two central banks, reports in Crypto Coin News said.
“[The Monetary Authority of Singapore] and the [Bangko Sentral ng Pilipinas] are like-minded in their focus on harnessing financial technology to reduce inefficiency and benefit individuals and businesses,” said MAS Managing Director Ravi Menon in a statement. “This Cooperation Agreement between our two agencies provides a framework for promoting financial innovation not only in our countries but can also potentially contribute to broader efforts in ASEAN.”
Reports pointed to the MAS’ efforts to create a digital Singaporean dollar on a blockchain as one potential initiative that could come into play with this collaboration with the Philippines. The two central banks will also explore streamlined Know Your Customers (KYC) solutions that use blockchain.
Visa Tests B2B Connect
Visa took the FinTech Festival platform this week to announce its own headway in Visa B2B Connect, its blockchain-based international B2B payments solution that includes Singpaore’s United Overseas Bank as a participating partner (alongside Commerce Bank in the U.S., Shinhan Bank in South Korea and UnionBank of the Philippines).
Kevin Phalen, Visa’s head of Global Business Solutions, told PYMNTS’ Karen Webster this week that Visa has successfully begun testing Visa B2B Connect with its bank partners, with a focus on using existing Visa rails and resources to develop a DLT-powered solution that boosts B2B payments efficiency.
“We’re now transacting on a global basis in this space, which is ripe for innovation and improvement,” he said. “We’ve gone from concept to development, to doing bank-to-bank transactions, in a relatively short span of time.”
According to Visa, Singapore is a particularly important market for this initiative.
“We’re excited to share these developments in Singapore, a country where a transformation in B2B payments could have a tremendous impact,” the company said in its announcement. “As home to the second busiest port in the world, Singapore is a major hub for cross-border shipping — an industry that can benefit greatly from enhanced and more predictable cross-border B2B payments.”
Prudential Singapore Launches Blockchain Trade Platform
In the private sector, Prudential Singapore announced this week the creation and launch of Fasttrack Trade (FTT), a blockchain-based trade platform developed in partnership with StarHub. FTT is designed for small businesses (SMBs) in particular, according to an announcement by the companies, to help businesses work with partners and distributors, trade, track shipments, make cross-border payments, access finance and obtain insurance all on the DLT-fueled platform.
FinTech startup Cité Gestion is using Prudential funding to develop the infrastructure, reports said, adding that the Fasttrack Trade solution could provide a faster and safer way for SMBs to conduct trade and access finance. StarHub, one of Singapore’s three major telcos, will link its small business customers to the FTT service, while Prudential will also be providing insurance products. Alternative lender Funding Societies will link SMBs on the platform to financing. The companies expect to launch the platform in the first quarter of 2018.