Schemes and Initiatives
 Published Date: 31 October 2022

Project Orchid

Project Orchid is a multi-year, multi-phase exploratory project examining the various design and technical aspects pertinent to digital Singapore dollar, from its functionalities to its interaction with existing payment infrastructures. Though MAS has assessed that there is no urgent need for a retail CBDC in Singapore at this point in time, MAS seeks to facilitate ongoing learning and advance the financial infrastructure in Singapore.

 

Objectives

  • Develop the technology infrastructure and technical competencies necessary for digital Singapore dollar (such as Central Bank Digital Currencies and tokenised bank deposits)
  • Explore potential use cases for a programmable money in Singapore

The first phase of the project aims to uncover potential use cases for a programmable digital SGD and the infrastructure required. Subsequent phases of Project Orchid will investigate the optimal ledger technology as well as its integration to the existing financial market infrastructure.

 

Phase 1 - PBM

Purpose Bound Money (PBM), explored in Phase 1 of Project Orchid, builds upon the concept and capabilities of programmable payment and programmable money. PBM refers to a protocol that specifies the conditions upon which an underlying digital currency can be used. PBMs are bearer instruments, with self-contained programming logic and transferrable between two parties without intermediaries.

To facilitate ongoing learning and collaboration, findings from Phase 1 of the project are published in a report (Project Orchid Phase 1 report) (3.59 MB)

 

Usage Patterns Table

This table examines how a person would use a PBM under different scenarios.

pbm usage patterns

 

Phase 1 features four trials across different scenarios:

Government to Person: Government Vouchers

At the 2022 Singapore FinTech Festival (SFF 2022), DBS Bank Ltd (DBS) and GovTech’s Open Government Products Division (OGP) will test the use of PBM for disbursements to selected individuals. Trial participants can use RedeemSGvouchers at participating food and beverage outlets, and merchants will directly receive the underlying digital SGD for the vouchers redeemed.

Corporate to Person: Commercial Vouchers
Temasek, StraitsX and Grab will test the issuance of PBMs as commercial digital vouchers to participants at the Singapore Fintech Festival 2022. Trial participants can utilise the PBM vouchers through their preferred wallet applications to offset goods purchased.
Government to Corporate to Person: Government Payouts
OCBC Ltd (OCBC) and the Central Provident Fund Board (CPFB) will test the use of PBM for funds disbursement from government agencies, without requiring recipients to have a bank account. The trial will be conducted using a test disbursement scheme in a controlled environment with selected participants.
Government to Corporate: Managing Learning Accounts
United Overseas Bank Ltd (UOB) and SkillsFuture Singapore (SSG) will test the use of PBM to enhance the current SSG Credit disbursement process, enabling SkillsFuture grants to automatically be released to participating training providers when eligibility conditions are met.

Phase 2 - Orchid Industry Group and Orchid Blueprint:

The industry group formed in Phase 2 expanded the use of PBM in new scenarios with a focus in commercial application in Singapore’s financial landscape. MAS, together with the industry group, published the Orchid Blueprint, which sets out the development of core infrastructure components and learnings from the various industry pilots and industry engagements.

New Industry Pilots

Corporate to Person: Programmable Rewards

Grab, UOB and FAZZ will trial the use of PBM for programmable rewards which improves consumer experience and reduces frictions faced by merchants, such as manual reconciliation of sales proceeds and time needed to onboard new sales campaigns.

Corporate to Person: eCommerce escrow arrangement
Amazon, FAZZ and Grab are collaborating on a pilot use case involving escrow arrangements for online retail payments. This allows payment to be released to the merchant only when the customer receives the items purchased, thus providing greater assurance to both parties.
Corporate to Corporate: Supplier financing
Amazon, together with DBS and HSBC, are exploring encoding disbursement conditions for tokenised payables to address financing needs for sellers, thereby improving working capital and potentially allow greater access to financing.
Corporate to Person: Fungibility of digital money
OCBC and UOB are investigating the fungibility of digital money across different digital money issuers, and how PBM can introduce programmability without impacting fungibility of the underlying digital money.
Corporate to Corporate: Institutional payment control
JP Morgan explored the use of payment controls to facilitate digital money transferability between institutional customers of different banks.
Person to Corporate: Wallet Interoperability
Ant Group, Fazz and Grab will be launching a pilot that leverages PBM concept to facilitate payments by Alipay users to GrabPay merchants. The PBM ensures that only verified Alipay wallet users can pay to whitelisted GrabPay merchants with transaction limits to deter fraudulent activity.

Orchid Blueprint

 

Considerations of the core infrastructure components and learnings from Phase 2 of Project Orchid are published in a report here (1.38 MB). To realise the potential of digital money and explore the use of a common settlement asset, MAS also announces plans for wholesale CBDC issuance.

 

Things to note:

Members of the public should note that:

  • MAS and companies participating in MAS’ initiatives will not ask for your personal banking information, security login credentials or private keys to digital wallets.
  • MAS advises the public to be alert and wary of unsolicited calls or messaging which offer deals that seem too good to be true; request personal information; give instructions to transfer funds to a third party account or offer investments into projects.

If you encounter any suspected scams related to digital assets involving MAS, please DO NOT transfer any funds, and report the matter to MAS.

For impersonation scams involving institutions regulated by MAS or phishing scams, please make a police report via the Police Hotline at 1800-255-0000, or submit it online at www.police.gov.sg/iwitness .