Hitachi and Bank of Tokyo-Mitsubishi UFJ (BTMU) have started Proof of Concept (PoC) testing for using blockchain technology for digitalization of cheque in Singapore.

For this testing, the companies jointly developed a system in which blockchain infrastructure are used for issuing, transferring and collecting electronic cheques.

Using the system, BTMU will issue and settle cheques and some of Hitachi Group companies in Singapore will receive the electronic cheque and deposit the funds.

Hitachi and BTMU, through this testing, will try to identify issues from various perspectives such as technology, security, operation, and legal perspectives, and try to realize new fintech services including digitalization of cheques.

Recently, the Monetary Authority of Singapore (MAS) released a consultation paper on proposed guidelines for a regulatory sandbox framework to facilitate the advancement of fintech services. With the framework, this PoC testing will aim to identify issues for practical use, issuing and settling cheque by blockchain technology on a system developed by Hitachi Asia.

The digitalization of checks will make it possible to automate the workloads of intermediaries for cheques in financial institutions, to avoid tampering and to speed up settling cheques, Hitachi said.

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The companies added that based on this PoC testing, they will increase efforts towards putting blockchain technology into practical use.