Can digital currency initiatives be a game changer in the evolution of money?

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The promises of the Ubin project

In 2016, MAS launched Project Ubin, a multi-year collaboration with the financial industry.

The project explores the use of blockchain and distributed ledger for the clearing and settlement of payments and securities.

The Ubin project aimed to develop easier to use and more efficient alternatives to current systems, based on digital tokens issued by the central bank.

MAS explored the concept of a tokenized Singapore dollar (SGD) for interbank payment in the initial phase. Subsequently, MAS collaborated with the Bank of Canada to study the use of CBDCs for cross-border and multi-currency payments.

One concern with CBDCs is whether the systems each country has in place are interoperable – so that CBDCs can be used for cross-border payments using multiple currencies and in multiple jurisdictions.

The MAS Dunbar Project seeks to address this problem, in partnership with the Bank for International Settlements Innovation Center in Singapore, as well as the Reserve Bank of Australia, Bank Negara Malaysia and the Reserve Bank of South Africa. .

The Dunbar Project explores the functional and technical designs, operating models and governance structures of several CBDC or m-CBDC arrangements – with a vision of faster, cheaper and more secure cross-border payments.

When cross-border interoperability of CBDCs between different countries is established, blockchain technology can enable retail investors to send money to foreign countries in real time. Recipients can receive the money instantly.

Mr. Heng explains, “This will greatly improve the speed and security of overseas remittances. Remittance fees will also be reduced as the efficiency of the process improves.

Last year, MAS announced that it was embarking on Project Orchid to develop the technology, infrastructure and technical skills needed to issue a digital Singapore dollar. It also aims to explore the potential benefits of retail CBDC solutions.

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