Emirates NBD Enlists UAE Central Bank in Blockchain Check Trial
One of the Middle East's largest banking groups is pushing ahead on a plan to use blockchain to prevent paper cheque fraud.
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
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.