One of the Middle East's largest banking groups is partnering with the central bank of the United Arab Emirates on a blockchain trial focused on bank check fraud.
first waded into the blockchain world last year, when it started testing the tech for payments applications and joined an expansive research and information-sharing effort backed by the Dubai government.
According to Ali Sajwani, Emirates NBD's chief information officer, those early efforts (both internal and collaborative) yielded key insights, namely that "the technology already has some real world applications for the short to medium term".
That led to the payments trials as well as ongoing work to apply the tech to its paper check process. Under the proposed system, the beneficiary of a cheque (as well as their bank) would be able to check whether it is valid, relying on a blockchain as a tamper-proof verification layer.
That work, Sajwani said, has continued to advance, and Emirates NBD is working with the UAE’s central bank on the initiative.
He went on to explain:
In comments, Sajwani also touched on the bank’s participation in a cross-border payments trial with India-based banking institution ICICI.
That test, unveiled in October, involved transmitting a transaction between an ICICI branch in Mumbai to an Emirates NBD branch in Dubai, recording on a distributed ledger.
When asked about the results, Sajwani said that while informative, the test wasn’t aimed at solving immediate barriers to payments - namely speed.
"While cross-border payments seem like a natural fit for application of blockchain technology between banks, they are largely solved with current technologies in terms of speed," he told CoinDesk. "As an example, our direct remittance service to India, Pakistan, or the Philippines takes a minute today."
At the same time, the bank positioned the test as one with an eye on the horizon, indicating that future developments around the tech could tip the scales to further applications.
“Even though today’s blockchains cannot operate with such speed and volume, we know this is only temporary. Blockchains provide tremendous potential in standardizing message flow between transacting parties and simplifying network architecture," Sajwani said, adding:
Pete Rizzo contributed reporting.
Image via YouTube
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.