Everything from banking to logistics is being influenced by blockchain
Singapore might be world’s smartest city. When you think of tech, you reflexively picture Silicon Valley. While Palo Alto may reign in the west, a tiny island nation of 5.6 million leads the east… and it’s turning to blockchain.
How did Singapore become an economic and technological powerhouse? A perfect storm of policy, technology and trade.
To understand Singapore today, one must know its story. Modern Singapore truly began in 1965 after it officially separated from Malaysia. The country initially struggled with sovereignty both economically and politically. Singapore’s Economic Development Board opened its borders to foreign investment and trade. Companies received handsome incentives to do business in Singapore. The manufacturing and financial sectors boomed. The country rapidly industrialized and shifted focus towards export oriented businesses.
Into the 70s, the Singaporean government invested heavily in computer education and progressive housing policies lifting many citizens out of poverty. The Singaporean population became increasingly educated and skilled. As a result, technology-oriented businesses began to thrive and textile and lower skilled industries started shifting to other parts of Asia.
Moving into the modern era, Singapore became a beacon for technological innovation. Its business- friendly climate coupled with a dense population of highly educated people make Singpaore a catalyst for early adoption of technology.
Singapore’s designation as a world-class trade hub only skyrocketed with the expansion of its ocean port and Changi airport. Its strategic location in the APAC region makes it ideal for transshipping and establishing foreign trade zones. Last year, the Port of Singapore processed over 30 million TEUs making it the second busiest ocean port in the world.
In Singapore, logistics is king. Anything to make trade faster and better usually starts there. Blockchain is no exception.
Blockchain in Singapore’s Financial Sector
The Monetary Authority of Singapore (MAS), the country’s central bank, spearheaded an experiment to digitize the Singaporean dollar using blockchain. Project Ubin aimed to streamline interbank payments and MAS officials were thrilled with the results.
The implementation of blockchain in Singapore’s central bank allows for the exchange of digital and cryptocurrencies for cash. It also facilitates the secure and immediate flow of international transactions between banks in Singapore and abroad.
Singapore isn’t alone. Banks in Canada, Japan and the United States started exploring blockchain proof of concept experiments as early as last year. So far, the results seem positive. Once the global financial infrastructure migrates to blockchain, other industries will likely follow suit.
What It Means for Logistics
With blockchain increasing the efficiency of Singapore’s banking system, it’s only a matter of time before it starts disrupting the country’s massive trade and logistics sector.
Tech startups in Asia look to blockchain to streamline both international and domestic logistics. Australia-based startup Yojee is utilizing Singapore as its testing ground. Yojee software uses artificial intelligence (AI) and blockchain to optimize fleet utilization for last-mile deliveries and container drays.
Blockchain capabilities help Yojee customers track shipments, exchange documents and locate equipment in real-time. Truckers in Singapore face some of the same inefficiencies as truckers in the US. Every minute saved in reducing wait time equates to increased profitability.
Helping smaller truckers obtain more volume through improved visibility will help them compete with bigger international carriers in Singapore and beyond.
Yojee isn’t the only player in the logistics blockchain space. Some of the world’s most pioneering blockchain companies call Singapore home. Major players such as IBM are working with Singaporean startups in blockchain innovation for both financial services and logistics.
Over the next decade, we can expect Singapore to lead the way in blockchain applications for the logistics sector.