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<p><a href="http://bravenewcoin.com/authors/luke-parker/" rel="noopener"><strong>Luke Parker </strong></a>|| <a href="http://bravenewcoin.com/news/tag/banking" rel="noopener">Banking </a>|| <a href="http://bravenewcoin.com/news/tag/blockchain+adoption" rel="noopener">Blockchain </a>|| <a href="http://bravenewcoin.com/news/tag/blockchain+adoption" rel="noopener">Adoption </a>|| <a href="http://bravenewcoin.com/news/tag/singapore" rel="noopener">Singapore  </a></p>
<p>Given Singapore’s financial strength and stability, coupled with its strategic location, the country has grown to become a leading global financial centre, with a major role in regional and international payments.</p>
<p>Payment flows between individuals and businesses in Singapore are substantial. As a major trading hub, trade finance centre, and gateway for investments in Asia, there is an even larger volume of international payment flows.</p>
<p>Singapore also consistently ranks as a top 5 world travel destination, and its payment systems serve millions of visitors each year, making interoperability and ease of access essential to global Travellers.  </p>
<p>While the choice of payment instrument varies greatly according to circumstance, cheques are commonly used in Singapore by consumers and businesses to charge or pay for goods and services.</p>
<p>Businesses take advantage of the ease-of-use, ubiquity and universal acceptance of cheques and the speed and transparency of the bank infrastructure to transfer large values in Singapore on a daily basis. Cheques are also preferred by more mature Singaporeans for higher-value payments.</p>
<p>The Monetary Authority of Singapore (MAS) recently began strategies to promote electronic payments, and published a “Singapore Payments Roadmap” authored by KPMG Advisory. </p>
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<p>MAS would like to encourage more FinTech experimentations so that promising innovations can be tested in the market and have a chance for wider adoption, in Singapore and abroad.</p>
<p>A key driver is the provision of a regulatory environment that is conducive for the innovative and safe use of technology, and MAS recently launched a Regulatory Sandbox to achieve these goals. A Sandbox can be used to carve out a safe and conducive space to experiment with FinTech solutions, and where the consequences of failure can be contained.</p>
<p>“The Sandbox cannot remove all risks, as failure is an inherent characteristic of innovation,” states MAS. “The Sandbox aims to provide an environment where if an experiment fails, its impact on consumers and on financial stability will be limited.”</p>
<p>Financial Institutions are currently free to launch new solutions without first seeking guidance, as long as they are satisfied with their own due diligence and there is no breach of legal and regulatory requirements. They typically experiment with their technological innovations in production environment by limiting the solution to specific type of customers or setting a threshold on transaction values.</p>
<p>The Sandbox offers an alternative solution. Deployed and operated by the applicant, MAS provides the appropriate regulatory support by relaxing specific legal and regulatory requirements, which the Applicant would otherwise be subject to.</p>
<p>Depending on the FinTech solution, the Applicant involved and the proposal made to MAS, MAS will determine the specific legal and regulatory requirements which it is prepared to relax for each case. </p>
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<p>Working within the MAS framework, Hitachi, Ltd and Bank of Tokyo-Mitsubishi UFJ, Ltd (BTMU) recently<a href="http://www.bk.mufg.jp/global/newsroom/news2016/pdf/newse0822.pdf" rel="noopener">announced</a> a Proof of Concept (PoC) that uses blockchain technology for digitalization of checks in the Republic of Singapore.”</p>
<p>Established in 1919, the <a href="http://www.bk.mufg.jp/global/" rel="noopener">Bank of Tokyo-Mitsubishi UFJ, Ltd.</a> (BTMU) is Japan's largest bank. The company has offices throughout Japan and a global network spanning close to 50 countries. BTMU is also a consolidated subsidiary of one of the world's largest financial groups, Mitsubishi UFJ Financial Group Inc (MUFG).</p>
<p>For the financial year ended March 31, BTMU <a href="http://www.mufg.jp/english/ir/fs/backnumber/2016mufg/pdf/mar/highlights1603_e.pdf" rel="noopener">reported</a> a profit of ¥586 billion (US$5.85b), which represents 61.59 percent of the Group's total profit of ¥951 billion (US$9.5b). MUFG had total assets of approximately 298.3 trillion yen (US$ 2.6t).</p>
<p><a href="http://www.hitachi.com/" rel="noopener">Hitachi, Ltd</a> was founded in 1910 and has headquarters in Tokyo. Hitachi is the parent company of the Hitachi Group, and forms part of the DKB Group of companies. Employing over 335,000 people worldwide, the company’s consolidated revenues for the financial year was ¥10,034 billion yen (US$100.28b). </p>
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<p>Using their blockchain Proof of Concept system, BTMU issues and settles checks. Hitachi Group companies in Singapore receive the electronic checks and then deposit the funds.</p>
<p>“Through the PoC testing, Hitachi and BTMU will be able to identify issues from various perspectives such as technology, security, operation, and legal perspectives, and aim to realize new FinTech services including digitalization of checks,” states the project's announcement.</p>
<p>The project is the latest from the two companies, which have a history of collaboration. MUFG and Hitachi Ltd<a href="http://www.japantimes.co.jp/news/2016/05/13/business/corporate-business/mufg-hitachi-agree-financial-tie-eye-leasing-merger/#.V7tvKfkrLIU" rel="noopener">announced</a> a capital and business alliance in financial services last May. A subsidiary of Hitachi Ltd, Hitachi Capital, <a href="https://www.hitachi.eu/en/about/press/pdfs/5_Notification%20of%20Change%20of%20Subsidiary.pdf" rel="noopener">entered</a> a business alliance with MUFG and its subsidiary, Mitsubishi UFJ Lease, through transfers of common stocks.</p>
<p>While MUFG hopes the alliance would expand their business in the area of financing infrastructure development, Hitachi was looking to streamline its operation. The collaboration precedes a possible corporate merger, according to a press release at the time. Prior to this blockchain project, however, each company has been independently exploring the use of the technology.</p>
<p>MUFG admitted to working on its own digital currency using blockchain technology in June, <a href="http://bravenewcoin.com/news/mitsubishi-ufj-japans-largest-financial-group-is-experimenting-with-blockchain-technology-to-build-its-own-digital-currency/" rel="noopener">the MUFG coin</a>, which is expected to be available in autumn 2017. Last March, Hitachi <a href="http://www.hitachi.us/press/03162016" rel="noopener">announced</a> a FinTech research organization in the Silicon Valley office of Hitachi’s Global Center for Social Innovation - North America (CSI-NA) in Santa Clara, California.</p>
<p>In a business strategy <a href="http://www.hitachi.com/New/cnews/month/2016/06/160601/20160601_09e_fandg_presentation.pdf" rel="noopener">report</a> published in June, the Hitachi growth strategy included the launching of financial businesses. Blockchain was named as one of the areas of FinTech-related service businesses it is exploring. “We began research on blockchains a few years ago,” a Hitachi spokesperson told BraveNewCoin. “But we do not comment on details and achievements because we are still in an early stage.” </p>
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<p>With this blockchain Proof of Concept under their belt, the two companies expect that “similar approaches can be applied to payment and supply chain finance in non-financial sectors in the future,” according to their announcement. “Based on this PoC testing, Hitachi and BTMU will increase efforts towards putting blockchain technology into practical use, and will contribute towards the global expansion and evolution of financial services.”</p>
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<p><a href="http://bravenewcoin.com/news/hitachi-and-bank-of-tokyo-mitsubishi-start-testing-blockchain-technology-for-electronic-check-processing-in-singapore/" rel="noopener">http://bravenewcoin.com/news/hitachi-and-bank-of-tokyo-mitsubishi-start-testing-blockchain-technology-for-electronic-check-processing-in-singapore/</a></p>
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