In a major move to explore the use of digital currency in Singapore, the city state’s central bank plans to launch a pilot project with the country’s stock exchange and eight local and foreign banks to use blockchain technology for interbank payments.
- Cross-border foreign currency transactions will also be reviewed under the pilot as Singapore’s central bank looks to position the financial center as an important Fintech hub.
- The effort is supported by the R3 blockchain research lab and BCS Information Systems, Ravi Menon, managing director of the Monetary Authority of Singapore (MAS), said at the Singapore Fintech Festival
- “Under the pilot system banks will deposit cash as collateral with the MAS in exchange for MAS-issued digital currency,” Menon said on Wednesday.
(SINGAPORE) The consortium includes Bank of America Merrill Lynch, The Bank of Tokyo-Mitsubishi UFJ, Ltd, Credit Suisse, DBS Bank Ltd, The Hongkong and Shanghai Banking Corp Ltd, JP Morgan, OCBC Bank, Singapore Exchange and United Overseas Bank.
Blockchain, which originates from digital currency bitcoin, works as an electronic transaction-processing and record-keeping system that allows all parties to track information through a secure network, with no need for third-party verification.
“The next phase of the project will involve transactions in foreign currency, possibly with the support of another central bank,” Menon told an audience of bankers and executives from technology companies.
Menon also said Singapore is in the process of creating a national know-your-customer or KYC utility through a personal data platform that will have government-verified personal details of residents.
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