Reply to Parliamentary Question on the proposed trial of a digital Singapore dollar
QUESTION NO 3865
NOTICE PAPER 1554 OF 2022
FOR WRITTEN ANSWER
Date: For Parliament Sitting on 28 November 2022
Name and Constituency of Member of Parliament
Assoc Prof Jamus Jerome Lim, MP, Sengkang GRC
To ask the Prime Minister with regard to the proposed trial of a digital Singapore dollar (DSGD) for government payouts and vouchers (a) whether the proposed restrictions on fungibility and bearer value will undermine the objective of understanding how the DSGD would operate as a genuine electronic currency; and (b) if so, how will the DSGD differ from an e-voucher system, such as RedeemSG.
Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:
1.A digital Singapore dollar is essentially money that can be digitally programmed to impose conditions under which the money can be spent. For example, merchants and issuers of digital Singapore dollars can specify the types of shops and validity period for their use prior to consumers receiving these money. When consumers make payment at these permitted shops, the digital Singapore dollars are transferred to the shop owners with the programmed conditions removed. The shop owners can then go on to use these digital Singapore dollars free of conditions, such as to pay their suppliers and so on. There are thus no restrictions on its fungibility and bearer value.
2.MAS has collaborated with the industry to initiate a few trials to test the potential applications of such a digital Singapore dollar. At the recent Singapore FinTech Festival, trial participants used vouchers adapted from RedeemSG at participating food and beverage outlets, and the merchants received digital Singapore dollars with each voucher redeemed.
3.Using digital Singapore dollars in this way offers some advantages over pure e-voucher systems:
Merchants would not need to submit a separate claim to the voucher issuer and wait to be reimbursed.
Consumers or merchants need not manually verify the validity of these vouchers, as the conditions for accepting them are digitally programmed.
Merchants can easily support vouchers issued by multiple issuers through a common scheme, rather than having to onboard each issuer separately.
4.MAS will continue these collaborations with industry participants. Future phases of work will study ways to improve user experience, as well as ensure security and privacy.