Technology
OCBC Says Strikes A First Blow In Southeast Asia For Blockchain Tech
A Singaporean bank claims to have scored a first in the use of blockchain technology.
OCBC, one of the “big
three” locally-headquartered Singapore banks alongside DBS and
United Overseas Bank, says it has become the first Southeast
Asian bank to make cross-border and local interbank fund
transfers through blockchain, the technology most associated with
the controversial bitcoin currency.
A pilot payment transaction between the lender and its
subsidiaries, OCBC Malaysia and Bank of Singapore, was carried
out last week using a blockchain solution designed by OCBC Bank
and local banking payment solutions company BCS Information
Systems, a statement from the bank said.
The platform is designed to allow interbank payments in Singapore
and abroad while cutting out the need for a payment intermediary,
a sign of how this new technology is thought to be
revolutionising the handling of sensitive information.
Blockchain, according to one definition, is a “distributed
database” maintaining a continuously-growing list of records,
known as blocks – hence the name. Each block contains a timestamp
and a link to a previous block, which is where the
chain comes in. Blockchain is associated with the digital
currency bitcoin because it serves as the ledger for
bitcoin transactions. However, it is argued that blockchain
technology has uses far beyond monetary systems and can handle
the transfer of sensitive information, such as legal
documents.
Banks, including those in Asia, have been busily setting up
so-called “innovation labs” to encourage the development of
solutions for clients based on new technologies such as
blockchain in recent months.
Bitcoin, a form of “virtual money”, is seen as controversial because it threatens fiat money systems as operated by modern central banks and is almost anonymous. This, critics say, creates opportunities for dirty money transactions. Defenders say its challenge to the conventional monetary order is precisely its point at a time when central banks threaten to cause inflation through massive quantitative easing.
