Singapore’s central bank develops blockchain-based prototype for multi-currency payments
The Monetary Authority of Singapore (MAS), Singapore's financial regulator has developed a blockchain-based prototype that enables payments to be carried out in different currencies on the same network.
The prototype network, developed by MAS in collaboration with JP Morgan and Temasek, has the potential to improve cost efficiencies for businesses. It is currently undergoing industry testing to determine its ability to integrate with commercial blockchain applications.
The applications that were successfully tested are being showcased at the Singapore Fintech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019.
The development marks the latest milestone for Project Ubin which is into its fifth phase. Project Ubin, a collaborative project with the fintech industry, explores the use of blockchain and distributed ledger technology (DLT), for settlement of payments and securities.
Building on the work of Phase IV of Project Ubin, the payments network will provide interfaces for other blockchain networks to connect and integrate seamlessly.
It will also offer additional features to support cases such as Delivery-versus-Payment (DvP) settlement
with private exchanges, conditional payments and escrow for trade, and payment commitments for trade finance.
Beyond technical experimentation, the fifth phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network.
Chia Song Hwee, President and Chief Operating Officer, Temasek, said,
“Blockchain technology has great potential in transforming businesses and opening up new business opportunities. To better understand the impact and value of blockchain technology, we are pleased to have partnered with MAS and JP Morgan for the Ubin platform.”
Till date, MAS and its partners have engaged in more than 40 financial and non-financial firms to explore the potential benefits of the network.
Sopnendu Mohanty, Chief Fintech Officer, MAS, said,
“There is growing evidence now that blockchain-based payments networks can enhance cost efficiencies and create new opportunities for businesses. We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts. We look forward to linking up with more blockchain networks to improve cross-border connectivity. This will be a big step forward in making cross-border transactions faster, cheaper, and safer.”
Accenture has been commissioned to publish the project report in early 2020. The report will describe the blockchain use cases that would benefit from a blockchain-based payments network and set out additional features that the network could provide.
Note: YourStory is in Singapore covering the Singapore Fintech Festival.
(Edited by Suman Singh)