"Achieving transparency and speed in transactions with purpose bound money" - Powered by OCBC
Key highlights
Challenges of facilitating payments in the construction industry
- No visibility over the use of the funds in a project such as buying materials, mobilising the equipment at the construction site or engaging sub contractors.
- Payment flow to the contractors can take several months because of manual verification, document processing.
The solution: Purpose bound money
- LTA funds a PBM account for the contractor to access when required.
- Smart contracts are executed. When pre-set conditions are met, funds will be dispersed.
- Visibility over different payments made - used to be done manually or in an opaque process that isn't digitalised.
Conclusion
The integration of blockchain technology and smart contracts in the construction industry represents a transformative shift towards greater efficiency, transparency, and accountability. By digitalizing manual payment processes and introducing purpose-bound money (PBM) accounts, the industry can overcome long-standing challenges such as delayed payments and lack of visibility over fund usage.
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Speakers:
- Melvyn Low, Head Global Transaction Banking, OCBC Bank
- Yong Yenn Leng, Chief Financial Officer, Land Transport Authority