The central bank of Singapore and that of Canada recently completed their first cross-border transaction using DLT (Distributed Ledger Technology).

The news comes from the Monetary Authorities of Singapore (MAC), which recently announced the success of the first transaction with the Bank of Canada, a project called ” Project Jasper-Ubin” which was progressing since 2016.

A Novel Contract

The banks used a Blockchain frame and digital currency that were provided by Corda from R3 and Quorum from JPMorgan, further, they linked their networks using the so-called “hashed-time-locked contracts, which is framed to be more organized.

This contract should enable more control over the transactions as it will be direct, eliminating the middlemen. That way the banks plan to offer quicker and more reliable payment service while hoping that other central banks will join the collaboration.

DLT For Cross-border payment

Scott Hendry, from the bank of Canada, expressed his thoughts regarding the future of cross-border payment:

“The world of cross-border payments is complicated and expensive: our exploratory journey into the use of DLT [distributed ledger technology] to try to reduce some of the costs and improve traceability of these payments has yielded many lessons.”

At first sight, this project is not different from many other projects of this kind in ways that institutions used DLT on centralized systems but the central banks of Singapore and Canada have shown that international remittances at central banks level can benefit from the technology.