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The Monetary Authority of Singapore is launching Ubin+, a collaborative project with international partners which will explore the cross border exchange and settlement of foreign currency transactions using wholesale central bank digital currency (CBDC).
“Through Ubin+, MAS will collaborate with international partners to explore a broader range of atomic settlement solutions. MAS is working with the central banks of France and Switzerland and the BIS Innovation Hub to explore the exchange and settlement of wholesale CBDCs with an automated market maker,” said MAS managing director Ravi Menon during his opening address at the Singapore Fintech Festival on Thursday.
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According to a press release, Ubin+ will also:
- Study business models and governance structures for cross-border foreign exchange (FX) settlement, where atomic settlement, based on digital currencies, can improve efficiencies and reduce settlement risks compared to existing payment and settlement rails.
- Develop technical standards and infrastructure to support cross-border connectivity, interoperability and atomic settlement of currency transactions across platforms using distributed ledger technology (DLT), and non-DLT based financial market infrastructures.
- Establish policy guidelines for the connectivity of digital currency infrastructure across borders, for better access and participation. This includes policy relating to governance, access and compliance issues for such linkages.
“Interoperable wholesale digital currencies offer efficiency gains through a growing range of cross-border use cases. We will evaluate these new use cases simultaneously, to keep pace with technological advancements, focusing on use cases that create good value for the broadest range of stakeholders. Working with competent, like-minded partners will accelerate central banks’ collective progress to an optimal future state of digital infrastructures,” MAS chief fintech officer Sopnendu Mohanty said in a press release.
The MAS also noted that Ubin+ “builds on the foundation” started with Project Ubin (a collaborative project with the industry that took place from 2016 to 2020 that explored the use of blockchain and distributed ledger technology for the clearing and settlement of payments and securities) and learnings from MAS’ participation in Project Dunbar (the exploration of a common platform for multiple CBDCs done in collaboration with the Bank for International Settlements (BIS) Innovation Hub, the Reserve Bank of Australia, Bank Negara Malaysia, the Monetary Authority of Singapore, and the South African Reserve Bank).
