Regulatory Authority of Singapore Acknowledges Vast Payment Potential of Blockchain Technology
The Chief Fintech Officer at the Monetary Authority of Singapore (MAS) believes that blockchain technology could help improve cross-border payments. Nonetheless, Sopnedu Mohanty said that they do not see much potential in retail bank digital currencies. He has also talked about Ripple, but they do not believe that it could have a positive effect on the central bank.
Blockchain Has A Large Potential
During the MIT Technology Review's Business of Blockchain on May 2, Mohanty explained that regulatory agencies didn’t know what blockchain technology was or how it worked. This is why the MAS decided to experiment with the technology and learn more about it. The MAS is the central bank of Singapore.
Since they started analyzing and working with it, the central bank was able to learn many different things, including how to deploy it, organize payments, settle transactions against securities, conduct cross-border payments and more. Mohanty said that although there were some benefits of implementing this technology for payments and transactions, they did not see any future for retail bank digital currencies.
Moreover, he said that MAS and the Central Bank of Canada used blockchain technology in order to send each other digital currency. In order to do so, both banks linked their respective blockchain projects and used existing systems rather than basing their operations in a public blockchain.
On the matter, Mohanty explained:
“The next wave of central bank blockchain projects can make further progress by bringing technology exploration together with policy questions about the future of cross-border payments.”
There are already some banks that decided to use blockchain technology and that launched their own cryptocurrencies. For example, JP Morgan Chase launched its own digital asset called JPM Coin that will be running on top of its permission blockchain network Quorum. The main intention is to help clients process payments and transactions in a fast and easy way.
Singapore has been very open towards virtual currencies and blockchain technology. Although some countries in the region decided to ban Initial Coin Offerings (ICOs), virtual currencies and other activities, Singapore remains a very open nation towards digital assets and distributed ledger technology (DLT).
However, the MAS has warned about scams that were taking place in the market and that were impersonating the financial institution. Moreover, they have also explained to users that there are some risks of investing in virtual currencies.