Singapore's central bank intends to launch a pilot blockchain-based project for interbank payments. The reason for this is the desire to explore the
Singapore’s central bank intends to launch a pilot blockchain-based project for interbank payments. The reason for this is the desire to explore the use of cryptocurrencies and the project will be developed in cooperation with the country’s stock exchange and eight local and foreign banks. The project has yet another claim – to position the financial center as an important Fintech hub as it plans to offer cross-border foreign currency transactions.
During the Singapore Financial Festival Ravi Menon, managing director of the Monetary Authority of Singapore (МАС) said the project is already supported by the R3 blockchain research lab and BCS Information Systems. He also added that within the pilot system banks will deposit cash as collateral in exchange for MAS-issued cryptocurrency.
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.
The blockchain technology was originally created to support digital currency Bitcoin and later all the digital currencies as it works like a digital public ledger. The system works as it records unlimited amount of data through transparent yet secure network that had no need of middle man and works properly linking directly customers within it.
Menon reveals the next step of the project will be aimed towards proceeding foreign currency transactions and will probably be supported by another central bank.
Policymakers in Singapore tried to attract investment in Fintech in order to meliorate regulation and setting up specific departments to serve the industry.
The Monetary Authority of Singapore also finalized guidelines for a “regulatory sandbox” on Wednesday that will allow financial institutions to test their new business models on the platform without taking any financial risks. Another important issue Menon revealed is that Singapore is currently working to create a national know-your-customer utility. It will proceed through a personal data platform and the government will verify all the personal details provided by residents.
In order to improve the efficiency of KYC checks the Monetary Authority of Singapore will cooperate with the government agencies to expand the “MyInfo service” platform.
After the money laundering case in Malaysian state, called 1Malaysia Development Berhad (1MDB), was discovered, Singapore took measures to strengthen the control towards banking industry.