The Monetary Authority of Singapore (MAS) has announced that it has successfully created a blockchain-based prototype that enables payments to be carried out in different currencies on the same network.
Developed in collaboration with J.P. Morgan and Temasek, the prototype is part of an ambition to improve cost efficiencies for businesses utilising modern technology.
Sopnendu Mohanty, chief fintech officer, MAS, explained: “There is growing evidence now that blockchain-based payments networks are able to enhance cost efficiencies and create new opportunities for businesses.
“We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts.
“We look forward to linking up with more blockchain networks to improve cross-border connectivity. This will be a big step forward in making cross-border transactions faster, cheaper, and safer.”
Representing the fifth stage of developing of ‘Project Ubin’, the payments network will provide interfaces for other blockchain networks to connect and integrate.
It is currently undergoing “industry testing” to evaluate its effectiveness when integrating with commercial blockchain applications.
Other additional features include Delivery-versus-Payment (DvP) settlement with private exchanges, conditional payments, escrow for trade and payment commitments for trade finance.
Applications tested successfully are set to be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019.
John Hunter, Global Head of Clearing and Interbank Information Network (IIN), J.P. Morgan, noted: “J.P. Morgan is excited to be an infrastructure partner of MAS and Temasek for Phase 5 of Project Ubin.
“By leveraging our key learnings from building the Interbank Information Network® (IIN) and the JPM Coin, J.P. Morgan is well-positioned to support the development of a blockchain-based payments network and operate at scale.”
As well as technical experimentation, Project Ubin will now seek the commercial viability and value of the blockchain-based payments network.
To date, MAS and its partners are said to have “engaged more than 40 financial and non-financial firms” to investigate the potential benefits of the network.
Furthermore, global consultancy firm Accenture has been commissioned to publish a project report in early 2020 that will delve into the potential use cases stemming from a blockchain-based payments network.
In addition, the technical specifications for the connectivity interfaces that were developed will also be released for public access under Apache License Version 2.0.
Chia Song Hwee, President & COO, Temasek, added: “Blockchain technology has great potential in transforming businesses and opening up new business opportunities. To better understand the impact and value of blockchain technology, we are pleased to have partnered with MAS and J.P. Morgan for the Ubin platform.
“The inclusion of non-financial services companies has demonstrated applicability of blockchain technology beyond capital markets and trade finance. We look forward to deeper collaboration and support for Singapore’s pioneering efforts in the blockchain space.”
