The Monetary Authority of Singapore (MAS) has announced its intention to launch a pilot program for wholesale central bank digital currencies (CBDCs) by 2024. This move aligns with global trends, as data from the Atlantic Council think tank shows that 130 countries are now exploring digital currency initiatives, representing 98% of the world’s economy.
Ravi Menon, the current Managing Director of MAS, made the announcement at the Singapore FinTech Festival 2023 earlier this week. The pilot will involve local banks and is designed to test the use of CBDCs for domestic payments. These digital currencies are intended for large-value transactions between banks and institutional players, showcasing a significant step toward financial innovation.
The groundwork for this initiative was laid through Project Ubin, which ran from 2016 to 2021. MAS collaborated with other central banks and financial institutions to investigate blockchain technology’s potential for clearing and settlement of payments and securities. Following the success of Project Ubin, MAS launched Ubin+ in November 2022, focusing on enhancing cross-border connectivity and international collaborations.
The upcoming pilot program will explore issuing tokenized bank liabilities that retail customers can use to transact with merchants, aiming to simplify the clearing and settlement processes on a unified infrastructure. Looking beyond 2023, Chia Der Jiun is set to take over as the Managing Director of MAS following Menon’s retirement.
In tandem with these developments, Nigel Green, CEO and Founder of deVere Group, has suggested that government-backed digital currencies like CBDCs may increase public interest in cryptocurrencies such as . He notes Bitcoin’s distinguishing features—decentralization, a fixed supply cap, and resistance to censorship—and its potential role in facilitating international transactions as national digital currencies emerge.
Green posits that CBDCs will likely spur competition and innovation within the digital currency space. This sentiment underscores the broader impact that national digital currency initiatives may have on the cryptocurrency landscape as a whole.
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