Programmable grant disbursements seek to enhance governance, operating efficiencies and user experience over government payouts

Programmable disbursements made to 27 local fintechs through a pilot in collaboration with EnterpriseSG and Singapore Fintech Association

Solution builds on DBS’ multi-year participation in the Monetary Authority of Singapore (MAS)-led Project Orchid

Singapore, 22 Aug 2024 - DBS has successfully piloted programmable grant disbursements to streamline government disbursements to businesses. The pilot demonstrates how government agencies can explore the use of this solution to execute disbursements more efficiently with greater governance controls and an enhanced user experience. The solution could also provide businesses faster access to government cash payouts.

In collaboration with Enterprise Singapore (EnterpriseSG), a pilot was run for grants disbursed under the agency's Local Enterprise and Association Development (LEAD) Trade Fairs and Business Missions programme[1], through the Singapore Fintech Association (SFA). The pilot was initiated by SFA, which builds on DBS’ experience in using Purpose-Bound Money (PBM)[2], to support grant disbursements to 27 participating fintech members during the Singapore Fintech Festival 2023.

Enhanced governance, less friction, faster payouts

Using DBS' permissioned blockchain, government agencies like EnterpriseSG and its designated intermediaries like SFA can determine and programme conditions, through DBS, governing grant disbursements. These include disbursements to approved recipients only, and upon the fulfilment of certain business conditions. Once smart contracts verify that the conditions are met, the grants are automatically disbursed as cash to beneficiaries.

This enhances governance control while reducing the need for manual processing of cash handling by intermediaries, enabling businesses to receive government cash payouts faster. In addition, the bank’s permissioned blockchain enables full visibility of the entire disbursement process, which provides greater transparency and helps organisations reap operating efficiencies across reconciliation and reporting.

Han Kwee Juan, Country Head of DBS Singapore, said: “This programmable grant disbursements pilot innovates a new payment instrument that leverages the learnings from our Purpose Bound Money pilots, and marks a key milestone in the industrialisation of blockchain technology. Smart contract technology automates and streamlines grant disbursements for government agencies to enable faster, more secure disbursements and payments. We envision this payment innovation being extended to more use cases including milestone-based project payments, consumer rewards and more.”

Shadab Taiyabi, President of SFA, added: “The solution is designed to streamline business grant disbursements that enables local companies to receive payouts more quickly and efficiently, providing them with additional capital to expand their key business areas. SFA will continue to support collaborations between the public and private sectors in solutions such as programmable grant disbursements as Singapore advances towards its Smart Nation objectives.”

This solution builds on DBS' multi-year participation in the MAS-led digital currency project, Project Orchid[3], which explores use cases for PBM and digital Singapore dollar in Singapore. In the next phase, DBS will explore extending PBM for more use cases with EnterpriseSG and other government agencies as part of Project Orchid.

In November 2022, DBS completed Singapore’s first programmable money use case for government vouchers in partnership with Open Government Products, where pilot users trialled the use of PBM for vouchers to be spent at multiple designated merchants, akin to a digital voucher.

[1] The LEAD Trade Fairs & Business Missions supports enterprises to access overseas markets through participation in international trade fairs and business missions led by Trade Associations and Chambers (TACs). TACs can tap the programme to help enterprises defray part of the costs incurred for these overseas missions and trade fairs.

[2] PBM is a protocol which specifies the conditions upon which funds can be disbursed when conditions are met. https://www.mas.gov.sg/publications/monographs-or-information-paper/2023/purpose-bound-money-whitepaper

[3] Project Orchid is a multi-year, multi-phase project led by MAS to develop the technology infrastructure and technical competencies necessary for a digital Singapore dollar. https://www.mas.gov.sg/schemes-and-initiatives/project-orchid