Singapore’s central bank and financial regulatory authority, the Monetary Authority of Singapore (MAS) along with state-owned enterprise Temasek Holdings, and the largest bank in the US, JPMorgan Chase are working to develop a prototype based on blockchain that will allow payments in multiple currencies on the same network, reported Business Times.
MAS claims the reason for this new system is because it can potentially correct cost waste for businesses.
The network is still in the testing phase to insure the compatibility with commercial blockchain applications. The Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology 2019 will introduce the successful tested applications.
“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,”
said MAS chief fintech officer Sopnendu Mohanty, Monday.
A Big Step Forward
The prototype payments network, created under Project Ubin will be providing interfaces for other blockchain networks to connect and integrate seamlessly. Technical specifications for connectivity interfaces will be released under the Apache License Version 2.0 for public access.
Additionally, the network will provide support for other use cases like escrow for trade, delivery-versus-payment (DvP) settlement with private exchanges, payment commitments for trade finance, and conditional payments.
“We look forward to linking up with more blockchain networks to improve cross-border connectivity. This will be a big step forward in making cross-border transactions faster, cheaper and safer,”
Project Ubin in Fifth Phase
MAS along with the financial industry is in its fifth phase of Project Ubin which also includes JPMorgan. Project Ubin uses blockchain and DLT to settle payments and securities.
It has already engaged over 40 financial and non-financial firms to explore the potential benefits of the blockchain-based network. The inclusion of non-financial services, Chia Song Hwee, president and chief operating officer of Temasek, said demonstrates that the nascent technology can also be used “beyond capital markets and trade finance.”
Accenture has been commissioned to publish a report describing the use cases that will benefit from the payments network and additional features it could provide, in early 2020.