Infocomm Development Authority of Singapore (IDA), DBS Bank and Standard Chartered Bank have developed the first distributed ledger based application for invoice financing.

The new application will allow banks to transform invoices into digital assets that will be registered in a decentralised ledger. It will help to avoid duplication of financing of the same invoice by different financial institutions.

The blockchain based decentralised ledger will perform as a common data depository accessible for third parties to follow invoice payments and verify authenticity of financed documents. The process of trade invoice financing should also become easier for lending banks and companies since they will need to consult one single source of information in order to check status of invoices.

The measure is claimed to strengthen security of trade finance invoicing in general and, thus, to improve trading environment and encourage more trade finance invoicing activities.

At the moment the new application exists in a proof of concept phase, but the developers have already announced that for the next stage they are considering to attract other industry shareholders – government institutions as well as other banks – to participate in the commercial advancement of the project.

Anna Lavinskaya