Singapore Begins 'Live' Trials of Wholesale Central Bank Digital Currency

• Singapore's Monetary Authority Prepares to Issue Live Central Bank Digital Currency
• MAS' Orchid Blueprint for Digital Money Transfers
• Development and Issuance of CBDCs for Wholesale Interbank Settlement
• Singapore's CBDC Exploration and International Perspectives
• The Significance of Live CBDC Issuance

Singapore's Monetary Authority Prepares to Issue Live Central Bank Digital Currency

The Monetary Authority of Singapore (MAS) has unveiled plans to issue a live Central Bank Digital Currency (CBDC) explicitly designed for wholesale settlement. This initiative is part of a broader scheme to expand asset tokenization trials and establish the necessary infrastructure for a digital Singapore dollar, as announced by the central bank.

MAS' Orchid Blueprint for Digital Money Transfers

The technological framework necessary for future digital money transfers is detailed in MAS' Orchid Blueprint. Additionally, a set of four new trials involving industry stakeholders has been designed to test various components of this system. The first of these, which will examine tokenized bank liabilities for retail payments, is scheduled for its first trial at the ongoing 2023 Singapore FinTech Festival, according to the bank's announcement.

Development and Issuance of CBDCs for Wholesale Interbank Settlement

As a supplement to the trials the financial industry is conducting involving retail and corporate users, MAS will begin developing CBDCs for wholesale interbank settlement in the coming year. For the first time, MAS will pilot the live issuance of wholesale CBDCs, a significant step forward from previous simulations conducted in test environments, the statement added.

The inaugural wholesale CBDC pilot by MAS will facilitate retail payments between commercial banks. Future tests may explore the possibility of cross-border settlements.

Singapore's CBDC Exploration and International Perspectives

Singapore has been actively examining the use of CBDCs for wholesale purposes. Simultaneously, international organizations have given nations the green light to prepare legislation and infrastructure necessary for digital fiat currency issuance amid an evolving payment innovation landscape. Some countries perceive CBDCs as a potential solution to private crypto. Ravi Menon, the Managing Director of MAS, has referred to cryptocurrencies as a failure.

The Significance of Live CBDC Issuance

The live issuance of central bank digital money to serve as a common settlement asset in payments marks a significant milestone in MAS' pursuit of digitizing money, which began in 2016. The issuance of wholesale CBDC underscores the role that central bank money plays in enabling safe and efficient payments, as stated in a press release.

Edited by Jonathan Stoker