Singapore's government is set to adopt a blockchain-based system for disbursing grants, a development spearheaded by DBS Bank. The new system, which employs blockchain's distributed ledger technology, was recently tested in a pilot involving the Singapore Fintech Association (SFA) and Enterprise Singapore (ESG), a statutory board under the Ministry of Trade and Industry.

The pilot, which included the disbursement of government grants to 27 SFA members, demonstrated the effectiveness of blockchain technology in enhancing both the efficiency and governance of the grant distribution process. By using smart contracts—self-executing contracts with the terms directly written into code—the system automatically releases funds once pre-determined conditions are met.

DBS Bank's permitted blockchain, which limits access to approved participants, played a crucial role in the pilot. The system offers full visibility into the grant disbursement process, enhancing transparency for all parties involved. This represents a shift from traditional, often cumbersome methods of grant distribution to a more streamlined, secure, and transparent system.

The blockchain-based solution is also informed by DBS Bank's participation in Project Orchid, a digital currency initiative led by the Monetary Authority of Singapore (MAS). This initiative explores the benefits of tokenisation, a process that converts rights to an asset into a digital token.

DBS Bank's foray into blockchain is not new. The bank has previously collaborated with digital payment provider Ant International on a blockchain-based treasury and liquidity management solution, indicating a broader trend of integrating blockchain technology across various financial services.