The Monetary Authority of Singapore (MAS) published a report on Phase 2 of the blockchain-oriented Project Ubin, which started in 2016. The report was prepared by Accenture, a professional services firm.
As noted by the publication, the blockchain also involved the consortium R3, the Association of Banks in Singapore (ABS) and the audit company Deloitte. The project focuses on interbank and cross-border payments solutions and the digitalization of the Singapore dollar.
The second stage of the initiative involves testing the gross settlement system in real time on the basis of three block-platforms - Hyperledger Fabric, Corda, and Quorum.
Central banks use gross settlement systems to handle large-scale monetary transactions between banks. The authors of the report are convinced that the introduction of blockchain technology in this sphere “reduces the role of central banks and payment system operators as centralized infrastructure operators.”
“This would also mean that a central financial market infrastructure operator would not be necessary, as the processes and data are distributed across the participants in the DLT network. A DLT-based RTGS system reduces the costs and resources for the day-to-day operations and eliminates the risk of the central bank being the single-point-of-failure of the entire financial ecosystem,” the report says.
Nevertheless, the responsibility of the financial regulator will include support for the operation of the nodes and monitoring the effectiveness of the current software in resolving possible disputes between network participants.
The Monetary Authority of Singapore is not going to stop there and has already hinted at introducing a distributed ledger into the market of debt obligations and cross-border payments.
“Future phases of Project Ubin could focus on a decentralized bonds payments system, which could be supported by MAS and the participant banks with execution driven by Singapore Exchange. This could deliver a more efficient fixed income securities trading and settlement cycle through DLT,” the report says.
Earlier, the Monetary Authority of Singapore declared that it would not directly regulate cryptocurrencies, but only counteract money laundering.