In the Second Reading Speech for the Payment Services (Amendment) Bill, Mr Ong Ye Kung, Minister for Transport and MAS' Board Member, highlighted the main amendments in the Bill that would enhance the regulatory framework for payment services in line with global regulatory standards.
MAS Helps Develop Blockchain-based Prototype for Multi-Currency Payments
Singapore, 11 November 2019… The Monetary Authority of Singapore (MAS) has led the successful development of a blockchain-based prototype that enables payments to be carried out in different currencies on the same network.
2 This prototype network, developed by MAS in collaboration with J.P. 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 tested successfully will be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019.
3 This development marks the latest milestone for Project Ubin which is into its fifth phase. Building on the work of Phase 4
4 Beyond technical experimentation, the fifth phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network. To date, MAS and its partners have engaged more than 40 financial and non-financial firms to explore the potential benefits of the network.
5 John Hunter, Global Head of Clearing and Interbank Information Network (IIN), J.P. Morgan, said, “J.P. Morgan is excited to be an infrastructure partner of MAS and Temasek for Phase 5 of Project Ubin. By leveraging our key learnings from building the Interbank Information Network® (IIN) and the JPM Coin, J.P. Morgan is well-positioned to support the development of a blockchain-based payments network and operate at scale.”
6 Chia Song Hwee, President & 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 J.P. Morgan for the Ubin platform. The inclusion of non-financial services companies has demonstrated applicability of blockchain technology beyond capital markets and trade finance. We look forward to deeper collaboration and support for Singapore’s pioneering efforts in the blockchain space.”
7 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. In addition, the technical specifications for the connectivity interfaces that were developed will also be released for public access under Apache License Version 2.0.
8 Sopnendu Mohanty, Chief FinTech Officer, MAS, said, “There is growing evidence now that blockchain-based payments networks are able to 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.”
About Project Ubin
Project Ubin is a collaborative project with the industry to explore the use of Blockchain and Distributed Ledger Technology (DLT) for clearing and settlement of payments and securities. 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 central bank issued digital tokens.
MAS partnered R3 and a consortium of financial institutions on a proof-of-concept project to conduct inter-bank payments using Blockchain technology, and published a report that covers the aspects of DLT that are most suited to settlement systems and details the design principles used for the prototype.
MAS and The Association of Banks in Singapore (ABS) led the successful development of software prototypes of three different models for decentralised inter-bank payment and settlements with liquidity savings mechanisms. MAS and ABS released a report describing the prototypes developed and the findings and observations from the project. The source-codes and technical documentations were also released for public access under Apache License, Version 2.0.
Phase 3: Delivery versus Payment (DvP)
MAS and Singapore Exchange (SGX) collaborated to develop Delivery versus Payment (DvP) capabilities for settlement of tokenised assets across different blockchain platforms, and jointly published an industry report which provides a comprehensive view of automating DvP settlement processes with Smart Contracts. The report also identified key technology and operational considerations to ensure resilient operations, and defined a market framework that governs post-trade settlement processes such as arbitration.
Phase 4: Cross-border Payment versus Payment (PvP)
The Bank of Canada (BoC), Bank of England (BoE) and MAS jointly published a report which assesses alternative models that could enhance cross-border payments and settlements. The report examines existing challenges and considers alternative models that could in time result in improvements in speed, cost and transparency for users. MAS and BoC subsequently linked up their respective experimental domestic payment networks, namely Project Ubin and Project Jasper, and conducted a successful experiment on cross-border and cross-currency payments using central bank digital currencies. MAS and BoC jointly published a report which proposes different design options for cross-border settlement systems.