Hitachi, Ltd and the Bank of Tokyo-Mitsubishi UFJ Ltd (BTMU) have started Proof of Concept (PoC) testing for using blockchain technology for digitization of cheques in Singapore.

In this PoC testing, Hitachi and BTMU communally developed a system in which blockchain infrastructure are used for issuing, transferring and collecting electronic checks. Using the system, BTMU issues and settles checks and some of Hitachi Group companies in Singapore receive the electronic check and deposit the funds.

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 digitization of checks.

In recent years, various efforts towards providing new financial services that utilize blockchain technology and making financial services more efficient have been accelerated. Blockchain is a technology which makes difficult to tamper the data, sharing the data related to processes among multiple computers over networks. With applying blockchain technology, it is expected to reduce system investments and to realize providing reliable and convenient financial services.

The Monetary Authority of Singapore has recently released a consultation paper on proposed guidelines for a regulatory sandbox framework to facilitate the advancement of fintech services.

The digitization of checks makes it possible to automate the workloads of intermediaries for checks in financial institutions, to avoid tampering and to speed up settling checks. In addition, it is expected that similar approaches can be applied to payment and supply chain finance in non-financial sectors in the future.

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.