DBS launches 24/7 treasury management blockchain pilot with Ant International - Industry roundup: 15 August
by Ben Poole
DBS launches 24/7 treasury management blockchain pilot with Ant International
DBS has announced the pilot launch of DBS Treasury Tokens, a treasury and liquidity management solution, in collaboration with Ant International. The global e-commerce firm will be able to use the digital form factor to achieve instant, multi-currency treasury and liquidity management on DBS’ permissioned blockchain for their entities across multiple markets.
In addition, DBS’ permissioned blockchain is integrated with Ant International’s Whale platform, enabling the company to seamlessly manage intragroup liquidity 24/7, thereby optimising workflow and visibility.
Ant International’s Whale platform is its next-generation treasury management solution. It uses blockchain technology, advanced encryption, and artificial intelligence to improve the efficiency and transparency of fund movements between bank accounts.
Large corporates like Ant International, which operate several entities across multiple markets, need to manage payments, collections, funding needs and cash positions across time zones and currencies. DBS Treasury Tokens enable Ant International to reduce the settlement of intra-group transactions from potentially days to seconds. This optimises intra-group liquidity and working capital, giving corporate treasurers greater visibility, predictability and control over the entire group’s cash position.
DBS’ permissioned blockchain is Ethereum virtual machine (EVM)-compatible and is integrated with its core payments engine. This enhances extensibility and interoperability with multiple industry payment infrastructures that DBS is involved in. This successful product launch by DBS demonstrates how established commercial banks and financial institutions can harness blockchain technology and smart contracts to deliver the next generation of banking services on a 24/7, atomic, and programmable basis.
The DBS Treasury Tokens offering stems from the learnings and systems developed from the bank’s multi-year participation in the Monetary Authority of Singapore (MAS)-led Project Orchid and Project Guardian to test the benefits of tokenisation. Project Orchid is a multi-year, multi-phase project which aims to develop the technology infrastructure and technical competencies necessary for a digital Singapore dollar. Project Guardian is a collaborative initiative between policymakers and the financial industry to enhance the liquidity and efficiency of financial markets through asset tokenisation.
The Treasury Tokens solution is one of the industry applications tested under Project Guardian. Since 2016, the bank has piloted transactions involving Purpose Bound Money, institutional-grade financial protocols, and atomic settlement use cases with tokenised bank deposits and securities.
Ant International is also actively involved in Project Guardian. It has developed a treasury management solution that will enable real-time multi-currency clearing and settlement, supporting over 40 currencies.
“This [project] is an important step forward in addressing challenges like reducing costs and transaction risks for cross-border payments,” said Kelvin Li, Head of Platform Tech, Ant International. “We have already seen successful use cases on our Whale platform in areas such as instant tax refund services and SME cross-border payments, and we will continue working together with industry partners and leveraging blockchain technology to enable more open and inclusive cross-border payments.”
UK and US see marginal changes in inflation battle
The UK’s Consumer Prices Index (CPI) gauge of headline inflation rose by 2.2% in the 12 months to July 2024, up from 2.0% in June 2024, according to data from the Office for National Statistics. Monthly, CPI fell by 0.2% in July 2024, compared with a fall of 0.4% in July 2023.
The most significant upward contribution to the monthly change in CPI annual rates came from housing and household services where prices of gas and electricity fell by less than they did last year. The largest downward contribution came from restaurants and hotels, where hotel prices fell this year, having risen last year.
Core CPI (excluding energy, food, alcohol and tobacco) rose by 3.3% in the 12 months to July 2024, down from 3.5% in June and below its recent high of 7.1% in May 2023, which was the highest recorded by the ONS since 7.2% in March 1992. The CPI goods annual rate rose from negative 1.4% to negative 0.6%. Notably, the CPI services annual rate fell to to 5.2% from 5.7% previously.
“Markets had a keen interest in services inflation – after two consecutive months of hotter-than-expected readings at 5.7%, the hawkish Bank of England committee members, who voted to hold, highlighted this as a critical factor, making it a key market signal,” noted Pierre Roke, Associate at Validus Risk Management. “Today’s 5.2% print vs 5.5% expected print validates the more dovish committee members and potentially leaving room for not just one more cut this year but two.”
In the US, the Bureau of Labor Statistics reported that US annual headline consumer prices inflation came in at 2.9% for July, slightly lower than the consensus expectation of 3.0% and down from 3.0% in June. Monthly headline CPI rose 0.2% in July after a fall of 0.1% in June. The core rate of inflation, which excludes foods and energy, came in on consensus at 3.2%, down from 3.3% in June. On a monthly basis, core CPI rose 0.2% in July versus a 0.1% gain in June.
“The July US jobs report, which was published on 2 August, caused a big repricing in the likely path for US interest rates,” summarised David Goebel, Investment Strategist at wealth management firm Evelyn Partners. “Expectations for the Fed meeting on the 18 September quickly moved to a 50 bps cut, before retreating again to settle on being essentially undecided between 25 and 50 bps move. Today’s developments did little to shift that dial - market movements were small following the release, with Treasury yields ticking up very marginally and the US dollar unchanged relative to sterling."
“There is little here to suggest that the Fed would go for a 50 bps cut in September and we think the original expectation of a 25 bps cut continues to be the most likely outcome,” Goebel added. “There is plenty of data to come before then though, including August updates on both the jobs market and inflation.”
EBA publishes final draft technical standards on market risk
The European Banking Authority (EBA) has published final amendments to its Regulatory Technical Standards (RTS) on the fundamental review of the trading book (FRTB). The revisions mostly aim to align these RTS with the Capital Requirements Regulation (CRR3) and ensure stability in the applicable regulatory framework. The RTS are part of the roadmap on the Banking Package.
The CRR3 introduced several changes to the FRTB and included mandates for the EBA to amend existing RTS to fit with the new Level 1 text. In particular, the EBA has been mandated to review the RTS on the treatment of foreign exchange and commodity risk in the banking book, the RTS on profit and loss attribution test and the RTS on risk factor modelability assessment
In respect to the details on the profit and loss attribution test, the RTS remove the aggregation formula for computing the total own funds requirements for market risk for an institution using the alternative internal model approach as this formula has been now introduced in the CRR3.
Regarding the risk factors’ modelability assessment, the RTS ensures that institutions can identify how far they rely on a third-party vendor for the purpose of assessing the modelability of a risk factor.
Finally, as regards the treatment of foreign exchange and commodity risk in the non-trading book, the RTS ensure that translation risk is duly captured by institutions.
22nd Century Technologies acquires TreasurySoft to strengthen ERP solutions
22nd Century Technologies, Inc. (TSCTI) has announced the acquisition of TreasurySoft, a specialist in PeopleSoft and Oracle Fusion ERP Treasury Management Systems. The move aims to strengthen TSCTI’s commitment to providing advanced Oracle Fusion and PeopleSoft solutions that enhance control, visibility, and transparency across corporate treasury, banking platforms, and financial operations.
TreasurySoft offers real-time insights into financial functions, including cash management, investment management, deal management, and risk management. These applications support a wide range of operational areas, such as payables, payroll, grants, leases, financial close, receivables, corporate banking, and accounting.
With the addition of TreasurySoft, 22nd Century Technologies will expand its ERP practice, offering digital transformation solutions tailored for federal, state, local and transit agencies. Backed by its dedicated Center of Excellence and expertise in digital finance transformation, strategic programme management, and enterprise-wide risk mitigation, the company will deliver Oracle ERP implementations and ongoing financial system optimisations.
Visa launches call for applications for next inclusive fintech accelerator cohort
Visa, in partnership with innovation platform Plug and Play, has announced the call for applications for the second cohort of the Visa Inclusive Fintech Accelerator. The accelerator is designed to accelerate the growth of fintech startups led by diverse founders.
Building on the success of the inaugural cohort, which featured 21 diverse founders advancing groundbreaking fintech solutions, the Visa Inclusive Fintech Accelerator is set to continue its mission of supporting diverse innovators in the financial technology sector. For the first cohort, Visa and Plug and Play selected dynamic startups that offered unique perspectives and innovative solutions, achieving notable progress in investment, customer onboarding, and partnerships with large enterprise customers.
For the second cohort, Visa and Plug and Play are seeking startups that are redefining financial technology and are led by a founder who identifies as underrepresented, is committed to serving underserved segments in North America, has demonstrated passion and commitment to inclusion, or has demonstrated resilience in their paths in the fintech space.
Startups must have a minimum viable product (MVP) to apply and should be based in and conducting business within the US or Canada. Selected startups will gain exclusive access to Visa's network and resources, receive mentorship from industry leaders, and have opportunities for pilot projects and strategic partnerships with Visa.
The accelerator program will span six months and culminate with a showcase at Plug and Play's bi-annual summit in Silicon Valley in June 2025. The Plug and Play DRIVE website will provide detailed information regarding the application process, eligibility criteria, and programme specifics.
“We introduced the Visa Inclusive Fintech Accelerator to drive greater innovation and progress by championing diversity,” said Vanessa Colella, Global Head of Innovation & Digital Partnerships, Visa. "We are so proud of our first cohort and all they accomplished and are thrilled to begin our search for the programme’s second cohort to uplift more diverse fintech founders and their brilliant ideas.”
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