Japanese mega-corporations Hitachi Ltd. (TSE: 6501, Hitachi) and the Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) have announced that they have started proof of concept testing for using blockchain technology for digitalization of cheques in Singapore. They developed a system in which blockchain infrastructure is used for issuing, transferring and collecting electronic cheques.
The developers explain that the digitalization of cheques 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.
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Using the concept system, BTMU issues and settles cheques and some Hitachi Group companies in Singapore receive the electronic cheques and deposit the funds. With the 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 cheques.
The developers aim to identify issues for practical use, issuing and settling cheques by blockchain technology on a system developed by Hitachi Asia Ltd., the Asian regional headquarters of Hitachi, Ltd. and BTMU as one of the collaborative creations between Hitachi and BTMU in the Asian region. Based on this testing, Hitachi and BTMU say they will increase efforts towards putting blockchain technology into practical use, and will contribute towards the global expansion and evolution of financial services.