Singapore Central Bank Launches Real-Time Digital Currency Pilot Program
Summary:
The Monetary Authority of Singapore (MAS) is piloting a real-time, Singapore dollar-based central bank digital currency (CBDC). The initiative also explores the use of a wholesale CBDC for payment settlements among commercial banks. In collaboration with local banks, the program aims to evaluate CBDCs as an asset for local transactions. Banks will issue tokenized liabilities to facilitate consumer transactions with merchants, settled via CBDC transfers. In addition, Project Guardian, the MAS's financial infrastructure test program, is expanding to assess more uses of asset tokenization.
Singapore's central bank, the Monetary Authority of Singapore (MAS), has announced the launch of a pilot program for a real-time, Singapore dollar-based central bank digital currency (CBDC). According to MAS Managing Director, Ravi Menon, the program will explore the use of a wholesale CBDC for instant settlement of payments across commercial banks - a noteworthy expansion from previous trials which were limited to a simulated environment. Menon also highlighted the plan to collaborate with local banks to assess the efficiency of a CBDC as a settlement asset for local transactions.
In this initiative, commercial banks will create tokenized liabilities, reflecting the claims on their financial statements. These tokens will enable retail consumers to conduct transactions with merchants, which will be fulfilled through an automatic transfer of the CBDC. Menon emphasized that using CBDCs will result in a smoother operation, as clearing and settlement will occur simultaneously on a single platform.
Wholesale CBDCs are primarily used for settling payments by central and commercial banks and major financial organizations. Another significant development, on November 15, was the addition of five more industry trials to the financial infrastructure evaluation program, known as Project Guardian, to further examine the potential of asset tokenization. The project's expansion witnessed the inclusion of prominent financial institutions such as BNY Mellon, HSBC, and Citi Group, taking the total count of members to 17.
Previously, on May 1, MAS and the New York Federal Reserve disclosed the outcome of a six-year-long trial assessing the efficacy of CBDCs in cross-border payments, labelled Project Ubin. The results testified to the potential of CBDCs to streamline and make cross-border payments more cost-efficient.
Published At
11/17/2023 5:16:59 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.