Singapore-based international banking and financial services company DBS Bank is working on a new blockchain-based treasury and liquidity management solution in collaboration with digital payment provider Ant International.

On August 13, DBS Bank announced the pilot launch of DBS Treasury Tokens, which Ant International will use to enable instant and multi-currency treasury and liquidity management. These new tokens are hosted on a permissioned blockchain used for DBS’s assets in various markets.

Permissioned blockchains are networks with an access control layer, often called “private blockchains.” In these types of blockchains, only participants with certain levels of pre-approved authorization are allowed, and users must obtain permission from the network owner to join the network.

Although permissioned blockchains use distributed ledger technology (DLT), they are not completely decentralized and include a specific control and access mechanism.

According to DBS, the bank’s permissioned blockchain is compatible with the Ethereum Virtual Machine (EVM) and is integrated with the bank’s main payment engine. This increases the system’s extensibility and interoperability with various industry payment infrastructures linked to DBS.

EVM compatibility ensures that various smart contract and dApp (distributed application) opportunities offered by the Ethereum ecosystem can also be used on DBS’s blockchain. This integration increases the bank’s operational flexibility and adaptability, enabling more effective liquidity management across multiple markets.

Integration with Ant International’s treasury management platform Whale allows the company to manage its intra-group liquidity seamlessly. DBS states that this integrated system optimizes workflow and visibility.

By using blockchain technology as well as artificial intelligence and encryption techniques, the Whale platform increases the transparency and efficiency of fund transfers between bank accounts. While artificial intelligence makes transaction processes faster and more reliable, encryption technologies ensure data security.

These features provide institutional customers with a more secure and efficient liquidity management experience.

It was also stated that the DBS Treasury Tokens project was developed with learnings and knowledge gained from the Central Bank of Singapore’s (MAS) projects testing the benefits of tokenization, such as Project Orchid and Project Guardian.

These projects have provided the opportunity to apply DBS’s experience in blockchain and token technology while exploring the potential benefits of tokenization. Tests conducted within the scope of Project Guardian investigated the feasibility of tokenization in accordance with market regulations and security standards.

Lim Soon Chong, group head of global transaction services at DBS Bank, stated that the new project meets an urgent need arising from the rise of e-commerce and on-demand services.

Chong emphasized that the partnership with DBS Treasury Tokens and Ant International will enable companies to safely scale their liquidity management capabilities and seize these opportunities.

He also added that DBS’s permissioned blockchain enables new efficiencies and capabilities in traditional banking services, such as “programmable, sharded and atomic value transfer.” These innovations aim to provide higher efficiency and reliability in banking services.