IBM recently announced plans to open a blockchain innovation center in Singapore to foster collaboration between government, academic and industry officials in creating blockchain enterprise solutions for finance and trade. Blockchain technology uses cryptographic hashing to “timestamp” and validate transactions, and was developed for the digital currency bitcoin.
In a statement announcing the center, Robert Morris, vice president of Global Labs, IBM Research, noted that “this is IBM’s first collaboration with the private sector and multiple government agencies within the same country to explore the use of blockchain and cognitive technologies to improve business transactions across several different industries.”
He added that “with new cloud services that make these technologies more accessible, leaders from all industries are beginning to take note of the resulting profound and disruptive implications [of blockchain technologies] in a range of settings including finance, banking, IoT, health care, supply chains, manufacturing, technology, government, the legal system, and more.”
For its first three years, the center’s staff, which includes Singaporean experts and researchers from IBM Research Labs worldwide, will aim to use blockchain technology to bring efficient multi-party finance transaction and process tools to market. IBM noted it could work with multinational banks and Fintech firms in this effort.
The center will also engage with small and medium-sized companies to create blockchains applications for use in finance and trade, and build on IBM’s prior work in the Linux Foundation Hyperledger platform.
Arvind Krishna, senior vice president IBM explained that blockchain technology can benefit the financial industry through its ability to “streamline technology infrastructures among different intermediaries and reduce complexity in financial networks, which helps to bring about significant efficiency gains,” as well as its ability to “reduce duplicative recordkeeping, eliminate reconciliation, minimize error rates and facilitate faster settlement. This in turn means reduced risk and lower capital requirements for financial enterprises.”
Sopnendu Mohanty, chief FinTech officer of MAS, welcomed the center’s role in advancing Singapore’s financial market. “The financial sector is well-placed to play a leading role in Singapore’s vision of being a Smart Nation. Given that technology is a key enabler of financial services, MAS is pleased to continue to work with companies like IBM to promote technology innovation in finance, and encourage the adoption of safe and efficient technology with the financial industry.”
IBM’s embrace of blockchain innovation comes just months after Deloitte announced a partnership with five blockchain technology companies to develop 20 prototype solutions for processes such as digital identity, digital banking, cross-border payments, and loyalty and rewards, among others.
Among those with whom Deloitte is collaborating is BlockCyber, a cloud blockchain provider that allows enterprises to easily build blockchain applications, and ConsenSys, a production studio creating decentralized blockchain applications and end-user tools, with whom Deloitte will focus on constructing digital banking technology applications.
Other partners include Bloq, a blockchain solutions provider Deloitte will utilize for creating blockchain prototypes for insurance industry, and Loyyal, a rewards platform using blockchains and smart contract technology. Deloitte is also working with Stellar.org, which connects financial institutions, payments systems and people to facilitate seamless money transfers.
In a statement, Joe Guastella, a principal with Deloitte Consulting, and U.S. and global leader of the financial services practice said, “Blockchain is proving to be a major disruptive force in financial services. The industry prototypes and pilots have shown this, and we continue to focus on helping our clients to make blockchain a reality for their businesses.”
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