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MAS Launches Expanded Initiative to Advance Cross-Border Connectivity in Wholesale CBDCs
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Singapore, 3 November 2022…The Monetary Authority of Singapore (MAS) today launched
Singapore, 3 November 2022…The Monetary Authority of Singapore (MAS) today launched Ubin+, an expanded collaboration with international partners on cross-border foreign exchange (FX) settlement using wholesale central bank digital currency (CBDC).
Ubin+ will focus on the following:
As part of Ubin+, the following projects will be undertaken with international partners:
Ubin+ will strengthen Singapore’s capabilities to use digital currency-based infrastructure for cross-border transactions. The initiative builds on the foundation started with Project Ubin (2016-2020) and learnings from MAS’ participation in Project Dunbar.
Mr Sopnendu Mohanty, Chief FinTech Officer, MAS, said “Interoperable wholesale digital currencies offer efficiency gains through a growing range of cross-border use cases. We will evaluate these new use cases simultaneously, to keep pace with technological advancements, focusing on use cases that create good value for the broadest range of stakeholders. Working with competent, like-minded partners will accelerate central banks’ collective progress to an optimal future state of digital infrastructures.”
(1) AMM, a concept commonly used in Decentralised Finance, or DeFi, enables the exchange and settlement of two or more digital assets to be performed automatically with a smart contract.
(2)Project Ubin is a multi-year multi-phase collaborative project with the industry to explore the use of Blockchain and Distributed Ledger Technology (DLT) for clearing and settlement of payments and securities. Project Ubin: Central Bank Digital Money using Distributed Ledger Technology (mas.gov.sg)
(3)Project Dunbar proved that a common platform for multiple wholesale CBDCs could enable cheaper, faster and safer cross-border payments. The project also examined how such a common platform could be made feasible from policy and governance perspectives. The project involved collaboration between the Bank for International Settlements Innovation Hub Singapore Centre, the Reserve Bank of Australia, Bank Negara Malaysia, the MAS and the South African Reserve Bank.
A wholesale CBDC is a digital form of central bank money that is used for interbank transactions and settlements, aiming to enhance efficiency and reduce risks in the financial system.
Atomic settlement refers to a transaction process where two parties exchange assets simultaneously, ensuring that either both parties complete the transaction or neither does, thus minimizing settlement risk.
Distributed ledger technology is a digital system for recording transactions in multiple places at once, ensuring transparency and security without the need for a central authority.
Interoperability in financial systems refers to the ability of different systems and organizations to work together seamlessly, allowing for efficient transactions and data exchange across platforms.
Policy guidelines in digital currency infrastructure are rules and regulations established to govern the use, access, and compliance of digital currencies across different jurisdictions.
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