Project Ubin’s Distributed Ledger Technology Payment System

About Project Ubin

Project Ubin is a joint effort of the Monetary Authority of Singapore (MAS) and the industry to initiate a Central Bank Digital Money using the Distributed Ledger Technology (DLT) to clear and settle securities.

By using the Distributed Ledger Technology, the project seeks to improve transparency and resiliency in financial transactions. Besides, the transactions will attract lower charges. One of the key objectives of the DLT project is to enable MAS and the industry to appreciate the potential benefits associated with it, upon its full implementation. This is in line with the ultimate aspiration to develop efficient, easy-to-use alternatives, which will embrace the digital technology. In the end, the technology will be a solid integration to the digital central bank-issued tokens.

Project Ubin Phase I

The first phase of Ubin deals with domestic inter-bank transactions using a central bank-issued SGD equivalent. On November 16, 2017, the Monetary Authority of Singapore announced its collaboration with R3, an LDT company. The collaboration also involves a consortium of financial institutions on a proof-of-concept scheme to initiate inter-bank payments using the Blockchain Technology.

The Consortium Comprises the Following Institutions:

  • Bank of America Merrill Lynch
  • Credit Suisse
  • DBS Bank
  • The Hongkong and Shanghai Banking Corporation Limited
  • J.P. Morgan
  • Mitsubishi UFJ Financial Group
  • OCBC Bank
  • R3

Other stakeholders include Singapore Exchange, UOB Bank, and BCS Information Systems, which is a technology provider to the project.

Phase 1 of the project ended successfully on March 9, 2017. The report “Project Ubin: SGD on Distributed Ledger” produced by Deloitte, covered DLT facets that are suited to settlement systems. It also detailed the design standards used for the model. The report will serve as a preamble to Distributed Ledger Technology and will provide insight into the model developed.

Project Ubin Phase II and Beyond

On October 5, 2017, the Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) announced that the consortium they lead has developed software samples of three different forms, which will aid the initiation of decentralized inter-bank transactions with liquidity saving methods.

The Consortium Comprises Eleven Financial Institutions and Five Technology Partners:

  • Bank of America Merrill Lynch
  • Citi
  • Credit Suisse
  • DBS Bank Limited
  • HSBC Limited
  • J.P. Morgan
  • Mitsubishi UFJ Financial Group
  • OCBC Bank
  • Singapore Exchange
  • Standard Chartered Bank
  • United Overseas Bank

The project Ubin team chose Accenture to develop and manage the prototypes. Three institutions R3, IBM, and ConsenSys provided support on the particular DLT platforms including Corda, Hyperledger, Fabric, and Quorum. Microsoft provided support for the deployment of the trial products on Azure Blockchain.

On November 14, 2017, MAS and ABS announced the publication of the report and the release of the source-codes and other technical documentations to the public. Through Apache License, financial institutions, and Version 2.0 Central banks, the public can be able to access the report. Besides, academic and research institutions, are urged to utilize the open-source codes to facilitate their experiments, research and innovation efforts.

Future Phases of Project Ubin

Two spin-off projects will control the lessons of the models developed. Singapore Exchange (SGX) will focus on enhancing the efficiency of the fixed income securities trading and settlement through the Distributed Ledger Technology (DLT). The second project works jointly with the central bank digital currency to initiate new methods to process cross-border transactions.

According to the whitepaper, “DLT is at the center of a massive push for innovation across the financial services industry. While DLT is by no means a one-size-fits-all solution, it has the potential to drastically alter the way we do business and interact with one another. The technology is also known as the “Internet of Value,” as it increases the efficiency, security, and transparency of transactional activities.”

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