Singapore’s largest bank, DBS, has unveiled DBS Token Services, a suite of functionality powered by blockchain, tokenization and smart contracts. The new service is available to institutions. To enable the expanded functionality, including 24/7, real time payments, DBS integrated its core banking system with its permissioned Ethereum-compatible blockchain.
DBS Token Services supports three sets of functionality, which were previously separately revealed as pilots. First off is Treasury Tokens, which are essentially tokenized deposits. This allows 24/7 cross border payments between DBS branches. As part of the pilot, Ant International adopted the solution to support intra-group transfers. It has been integrated with Ant’s Whale platform for treasury management.
“By leveraging tokenisation and smart contract capabilities, DBS Token Services enables companies and public sector entities to optimise liquidity management, streamline operational workflows, strengthen business resilience, and unlock new opportunities for end-customer or end-user engagement,” said Lim Soon Chong, Group Head of Global Transaction Services, DBS Bank.
“It marks a significant step forward in transaction banking and demonstrates how established financial institutions can leverage blockchain technology to deliver new ground-breaking features and experiences.”
Smart contracts for conditional payments and rewards
The second set of functionality is the use of smart contracts for conditional payments. DBS piloted the functionality with Enterprise Singapore, which provided government grants to 27 fintech firms. Provided beneficiaries met the conditions, the smart contract automatically triggered money transfers to them. Here, the smart contracts were used for workflow to trigger conventional payments without tokenization.
A third functionality is corporate vouchers, using the Singapore concept of purpose bound money (PBM). DBS was previously involved in PBM trials as part of Singapore’s Project Orchid.
Plus the bank is currently testing similar functionality as part of Hong Kong’s e-HKD+ trials, which now include tokenized deposits. Green activities can allow a company to provide ESG rewards points to clients. In turns these rewards, which are essentially tokenized deposits wrapped in a smart contract, can be redeemed at designated merchants provided the tokens are used to buy green products. The Hong Kong trials don’t use real money.
Many of the DBS innovations follow its involvement in several initiatives led by the Monetary Authority of Singapore (MAS), including Project Ubin and Project Orchid for CBDC and Project Guardian for tokenization. Partior, the multi-bank cross border payment network, grew out of Project Ubin. DBS was a co-founder alongside JP Morgan, Temasek and Standard Chartered.
Other banks that have launched similar solutions include JP Morgan’s JPM Coin and Citi Token Services.
Ledger Insights Research has produced a report on tokenized deposits, bank stablecoins and DLT payments which highlights more than 70 projects.
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