Singapore’s regulator has said in an interview to a television channel that before deciding on whether to commercialize the trial on blockchain technology and its own digital currency, the country plans to conclude its experiment with both the technological aspects next year.
“Project Ubin” – an exploration of blockchain or distributed ledger technology, was announced by the Monetary Authority of Singapore (MAS) in 2016.
There are five phases that the project is split into. The Singapore regulators have managed to complete the first phase earlier this year which was engaged at closely looking at establishing a proof-of-concept design to conduct inter-bank payments using blockchain technology. The development of three different models for inter-bank payments using blockchain technology is the designing and aim of the second phase which was completed earlier this month.
The third phase is related to delivering securities, the fourth phase deals with ensuring details for cross border payments and the final phase is made up of using a digital version of the Singapore dollar to carry out real transactions and buy assets and at present, the MAS trial is looking at all of these aspects of the project.
“I hope next year we will be done with all the elements,” Sopnendu Mohanty, chief fintech officer at MAS, said to a television channel about the completion of the rest part of the project.
Also involved in the trial project are a number of major and large global banks such as the Bank of America Merrill Lynch, Citi and Credit Suisse.
This is a way to “bring the broader ecosystem together so we all learn together”, said Mohanty.
On issues ad questions related to whether the experiment would end up in a commercial product or how the experiment could affect regulation around digital currencies, the MAS fintech chief did not say anything. Instead, it is positive for experimenting with new technology is the message that the MAS hoped to deliver and show other regulators.
“Don’t fear doing experiments and don’t fall into traps of signaling policy changes. Some regulators are afraid to do experiments because of this tremendous external pressure on them. We are trying to drive that culture globally,” Mohanty said.
This year, there has been a sharp increase in the interest in digital currencies all across the world and the economic world.
Issues related to how to handle the rise of cryptocurrencies are being looked at by many regulators at the present moment. While very recently, Japan has allowed bitcoin to be accepted as a method of payment, on the other hand, China, for example, has banned cryptocurrency exchanges.
And like some other countries like Singapore, there are some countries that are also looking into issuing their own digital currency. It is looking into launching its own cryptocurrency, Estonia has said.
(Adapted from CNBC)