The Monetary Authority of Singapore (MAS) has released a whitepaper proposing the use of digital money such as central bank digital currencies (CBDCs), tokenized bank deposits, and stablecoins on a distributed ledger.
These developments build on the concept of Purpose Bound Money (PBM), which enables senders to specify conditions, such as validity period and types of shops, when making digital money transfers.
The Whitepaper was was developed in collaboration with the International Monetary Fund, Banca d’Italia, Bank of Korea, financial institutions and FinTech firms.
Alongside the whitepaper’s release, the MAS has also stated that both Financial Institutions and FinTech firms are launching trials to test the usage of PBM.
Amazon, DBS, Grab, and StraitsX (FAZZ) are some of the names involved, with their pilot schemes falling under two main umbrellas – online commerce and programmable rewards.
“This collaboration among industry players and policymakers has helped achieve important advances in settlement efficiency, merchant acquisition, and user experience with the use of digital money. More importantly, it has enhanced the prospects for digital money becoming a key component of the future financial and payments landscape.” said Mr Sopnendu Mohanty, Chief FinTech Officer at MAS.
These trials are part of MAS’ long-running journey to leverage distributed ledger technology.
In 2021, the MAS launched Project Orchid, a multi-year, multi-phase exploratory project. It aims to examine the “various design and technical aspects pertinent to a retail CBC system from Singapore”.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
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