The Monetary Authority of Singapore, which has been actively exploring CBDCs in the past, will now start trials for central bank digital money.
A few months back, The Monetary Authority of Singapore (MAS) released a policy paper on digital money, covering all its aspects. It prepared the paper in collaboration with several international organizations like the IMF. With such plans already in store for digital currencies, the regulator finally announced upcoming trials for central bank digital money.
Specifically, the Singapore regulator plans to issue a ‘live’ wholesale central bank digital currency (CBDC). The project would involve creating the infrastructure for a digital Singapore dollar. Meanwhile, it would also include tokenization of banking assets.
In a press release, the Singapore Monetary Authority stated it would promote wholesale CBDCs, regulated stablecoins, and tokenized bank liabilities. It also released an infrastructure framework for digital money called Orchid Blueprint.
It plans to create a settlement ledger for recording transfers of digital money. Further, a tokenization bridge, programmability protocol, and a name service are also part of the infrastructure blueprint. The MAS will extend the CBDC trials for Orchid Blueprint, for which it listed four new trials.
The CBDC trials include those for tokenized bank liabilities, wallet interoperability, supplier financing, and institutional payment controls. JP Morgan is especially working on exploring the institutional payment controls for the trials. The live wholesale CBDCs will initially test retail transactions between commercial banks. It could eventually be used for cross-border transfers, too.
“The “live” issuance of central bank digital money for use as a common settlement asset in payments is a significant milestone in MAS’ digital money journey that began in 2016. The issuance of wholesale CBDC reinforces the role that central bank money plays in facilitating safe and efficient payments,” said the MD of MAS, Ravi Menon.
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