Singapore Central Bank to Trial Live Wholesale CBDC for Settlements


Singapore Central Bank to Trial Live Wholesale CBDC for Settlements
courtesy of cointelegraph.com

Pilot Program for Singapore Dollar-Based CBDC Announced

Singapore's central bank has revealed plans for a pilot program involving a live central bank digital currency (CBDC) based on the Singapore dollar. The Monetary Authority of Singapore (MAS) will collaborate with local banks to test the use of CBDCs for settlements.

Instantaneous Settlement of Payments Across Commercial Banks

MAS Managing Director Ravi Menon announced the pilot program at the Singapore Fintech Festival, stating that it will enable the "instantaneous settlement of payments across commercial banks." Previously, the MAS had only simulated the issuance of a CBDC in test environments.

Tokenized Liabilities for Retail Customers

As part of the test program, banks will issue tokenized liabilities that represent claims on their balance sheets. Retail customers will be able to use these tokenized liabilities for transactions with merchants, with settlement occurring through the transfer of a wholesale CBDC. This streamlined process eliminates the need for separate clearing and settlement systems.

Expansion of Financial Infrastructure Test Program

In addition to the CBDC pilot program, the MAS has introduced five new industry pilots as part of its financial infrastructure test program, known as Project Guardian. These pilots will explore various use cases for asset tokenization. The project has also expanded its membership, with major financial institutions such as BNY Mellon, HSBC, and Citi Group joining the initiative.


Singapore Central Bank to Trial Live Wholesale CBDC for Settlements
courtesy of cointelegraph.com

Potential for More Efficient Cross-Border Payments

The MAS and the New York Federal Reserve previously conducted a six-year-long trial program, known as Project Ubin, to assess the utility of CBDCs in cross-border payments. The results showed that CBDCs have the potential to make cross-border payments more efficient and cost-effective.






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