There is no registration required for using Smart Cheque. It will be created via Bank’s online channels as a smart contract on Blockchain and must be sent to the beneficiary via email or any other digital channel.
The data is securely written on a private Blockchain network of a set of Banks and Central Bank. The data access across the blockchain network is finely controlled with rules defined for data privacy in Smart Contracts.
Paper based forgery is getting easier with sophisticated operations.
Security features in the paper cheques are expensive to print, process costing an estimated AED 140million annually.
Image based clearing looses security features printed on the cheques, manual entry can result in typos.
Huge operational overhead for clearing and storing cheques, maintaining ledgers and reconciliation.
Slow processing - no transactions on holidays, cut-off times. No visibility on the cheques in circulation.
It carries “Promise to Pay” which is legally enforced.
Allow guaranteed future dated payment to beneficiary. PDCs are used as payment guarantee for a large item or service over time.
Cheques are commonly used to secure repayment of debt in the UAE as an alternative to letters of credit, future payments.
Freedom to the cheque receiver to delay presentment of cheque if needed.