Project Ubin: Central Bank Digital Money using Distributed Ledger Technology

Project Ubin is a collaborative project with the industry to explore the use of Distributed Ledger Technology (DLT) for clearing and settlement of payments and securities. DLT has shown potential in making financial transactions and processes more transparent, resilient and at lower cost. The project aims to help MAS and the industry better understand the technology and the potential benefits it may bring through practical experimentation. This is with the eventual goal of developing simpler to use and more efficient alternatives to today’s systems based on digital central bank issued tokens.

Phase 1: Domestic inter-bank payments using a central bank issued SGD equivalent

MAS announced on 16 November 2016 that it is partnering R3, a Distributed Ledger Technology company, and a consortium of financial institutions on a proof-of-concept project to conduct inter-bank payments using Blockchain technology. The consortium includes Bank of America Merrill Lynch, Credit Suisse, DBS Bank, The Hongkong And Shanghai Banking Corporation Limited, J.P. Morgan, Mitsubishi UFJ Financial Group, OCBC Bank, R3, Singapore Exchange, UOB Bank, and BCS Information Systems as a technology provider to the project.

The successful conclusion of Phase 1 was announced on 9 March 2017. Deloitte was commissioned to produce a report that covers the aspects of DLT that are most suited to settlement systems and details the design principles used for the prototype. The report “Project Ubin: SGD on Distributed Ledger” will serve as an introduction to Distributed Ledger Technology (DLT), and provide an understanding of the prototype developed.

Phase 2 and beyond

MAS and The Association of Banks in Singapore (ABS) announced on 5 October 2017 that the consortium which they are leading has successfully developed software prototypes of three different models for decentralised inter-bank payment and settlements with liquidity savings mechanisms.

The consortium includes 11 financial institutions and five technology partners. The participating financial institutions are Bank of America Merrill Lynch, Citi, Credit Suisse, DBS Bank Ltd, HSBC Limited, J.P. Morgan, Mitsubishi UFJ Financial Group, OCBC Bank, Singapore Exchange, Standard Chartered Bank, and United Overseas Bank. Accenture was appointed to manage and develop the prototypes. R3, IBM, and ConsenSys were engaged to provide support on the respective DLT platforms of Corda, Hyperledger Fabric and Quorum. Microsoft was engaged to support the deployment of the prototypes on Azure Blockchain.

MAS and ABS announced on 14 November 2017 that the report has been published and the source-codes and technical documentations have been released for public access under Apache License, Version 2.0. Central banks, financial institutions, as well as academic and research institutions are encouraged to tap on the open source-codes to facilitate their experiments, research and innovation.

Future Phases

There are two spin-off projects that will leverage the lessons of the prototypes developed. The first project, driven by the Singapore Exchange (SGX), focuses on making the fixed income securities trading and settlement cycle more efficient through DLT. The second project focuses on new methods to conduct cross border payments using central bank digital currency.

Last Modified on 17/01/2018