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Singapore’s central bank completes blockchain-based inter-bank payment pilot

The Monetary Authority of Singapore (MAS) has completed a pilot project that was carried out for inter-bank payments using blockchain technology.

In November last year, MAS announced that it is partnering with R3 and a consortium of financial firms to conduct blockchain technology-based interbank payments.

MAS said: “The project has achieved the objectives of producing a digital representation of the Singapore dollar for interbank settlement, testing methods of connecting bank systems to a DLT, and making the MAS Electronic Payment System (MEPS+) interoperate with the DLT for automated collateral management.”

The central bank plans to launch two spin-off projects that will leverage the results of the pilot project.

One of the projects will be aimed at increasing the efficiency of fixed income securities trading and settlement cycle by using distributed ledger technology (DLT). The project will be driven by the Singapore Exchange (SGX).

The second project will focus on finding new ways to carry out cross border payments using central bank digital currency.

The blockchain consortium has roped in Deloitte to study the aspects of DLT that can be deployed for settlement systems. Deloitte is expected to submit the report soon.

To enable settlement of cross-border payments using central bank accounts,  MAS is in the early stages of discussions to develop links from Singapore to other countries using DLT.  

MAS Chief FinTech Officer Sopnendu Mohanty said: “This wholesale payments project has demonstrated the commitment of MAS and the industry to co-create concrete use-cases for technologies such as DLT.

“Already, some institutions have embarked on projects that are inspired by this collaboration. We look forward to the next phases of our project which will develop trial applications for securities settlement and cross border payments.”

Image: The MAS Building at 10 Shenton Way, Singapore. Photo courtesy of Nicolas Lannuzel/Wikimedia Commons.