Monday, November 11, 2021

The Monetary Authority of Singapore develops a blockchain-based prototype for cross-border payments with the help of JP Morgan

According to a publication by the Monetary Authority of Singapore (MAS) on November 11, the Singaporean regulator announced that in collaboration with JP Morgan and Temasek, it has developed a blockchain-based prototype that enables cross-border payment to be carried out in different currencies on the same network.

According to the Monetary Authority of Singapore (MAS), this prototype network will make cross-border payment more cost-efficient than before. In order to determine its capabilities to integrate with banking and commercial blockchain applications, the prototype is undergoing industry testing

The authority further noted that the successfully tested applications would be presented at the Singapore FinTech Festival and Singapore Week of Innovation and Technology (SFF x SWITCH) 2019.

According to the authority, the latest development is the part an MAS initiative called Project Ubin. This project enables MAS to explore the use of Distributed Ledger Technology (DLT) for the clearance and settlement of payments and securities. In collaboration with other crypto players, it aims to help MAS and crypto industry to get a better understanding of the blockchain technology at industrial level.

The Authority said:

Building on the work of Phase 4 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 use cases such as Delivery-versus-Payment (DvP) settlement with private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.”

MAS also noted that Accenture would be publishing the project report in early 2020 with details pertaining to the several use cases of blockchain technology that would bolster payment networks.

Sopnendu Mohanty, Chief FinTech Officer at MAS, about the latest development, 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.”

John Hunter, Global Head of Clearing and Interbank Information Network (IIN) at JP Morgan, commented:

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.”

Chia Song Hwee, President & Chief Operating Officer of Temasek, said:

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.”

Over the last 2 years, Singapore has grown itself into crypto hub as almost every significant crypto player is shifting its business in the country. MAS is also putting its best efforts to make Singapore a safe heaven for crypto-related businesses as Crypto Economy reported on November 1 that MAS issued a CMS license to swiss cryptocurrency bank Sygnum to provide digital asset management services to institutional and private qualified investors in Singapore.

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