The central bank said on Thursday that the Monetary Authority of Singapore (MAS) intends to launch a “live” central bank digital currency (CBDC) for wholesale settlement.According to MAS, the strategy is a component of a larger series of efforts to establish the foundation for a digital Singapore currency and to increase the number of asset tokenization trials.
The Orchid Blueprint by MAS lays out the technological framework needed for digital money transfers in the future. A recent series of four experiments with industry participants aims to evaluate different elements of this framework.One will be tested initially at the current Singapore FinTech Festival 2023, which is examining tokenized bank liabilities for retail payments, the bank said.
“To complement the digital money trials by the financial industry involving retail and corporate users, MAS will commence the development of CBDC for wholesale interbank settlement next year. MAS will pilot the “live” issuance of wholesale CBDCs for the first time, after previously simulating issuance within test environments,” the statement added.
Future tests may examine cross-border settlements, but the first wholesale CBDC trial by MAS will settle retail payments between commercial banks.CBDCs for wholesale use have already been investigated in Singapore.International bodies have also given countries the green light to set up the infrastructure and laws necessary for producing digital versions of fiat currencies in order to keep up with the latest developments in payment technology.MAS Managing Director Ravi Menon referred to cryptocurrencies as “a failure on Thursday,” and some nations see CBDCs as a response to private cryptocurrency.
“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,” Menon said in a press statement.