Singapore is Planning a Wholesale CBDC Pilot Program for Next Year

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Last Updated on November 19, 2023 by Bitfinsider

Singapore’s Monetary Authority stated on Thursday that it intends to create a “live” central bank digital currency (CBDC).

The regulator intends to collaborate with local banks, and a wholesale CBDC will be utilized “as a common settlement asset in domestic payments.”

“Retail customers will be able to use these tokenized bank liabilities in transactions with merchants who can in turn credit these tokenized bank liabilities with their respective banks,” Ravi Menon, the managing director of MAS, stated.

MAS had only simulated issuing CBDCs in test situations prior to the announcement.

“The ‘live’ issuance of central bank digital money for use as a common settlement asset in payments marks an important milestone in the MAS’ digital money journey, which began in 2016.” “The issuance of wholesale CBDC strengthens the role of central bank money in facilitating safe and efficient payments,” Menon added.

In addition to the CBDC, MAS is experimenting with purpose-bound money as a “common protocol to specify the conditions for the use of digital money.”

Under study Orchid, the name of the study investigating a CBDC system, the regulator will launch four trials to test various infrastructures.

The primary trials will include tokenized bank liabilities, wallet interoperability, supplier financing, and institutional payment controls.

“J.P. Morgan is exploring the use of payment controls to enable a bank’s institutional clients to hold deposit tokens and transfer them to clients outside of the issuing bank’s direct customer base as long as the banks are part of an agreed trust ecosystem,” MAS said in a statement.

Amazon and HSBC use PBM to tokenize Amazon payables to other merchants.

“This will help unlock liquidity for merchants, thereby improving merchants’ access to financing and working capital,” according to a news statement.

MAS also unveiled the Project Orchid blueprint, which delves into the technology infrastructure required for a CBDC system.

The announcement comes after the International Monetary Fund’s Kristalina Georgieva stated on Wednesday that CBDCs have the potential to “replace cash” and asked central banks to continue investigating potential CBDC launches.

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