Promises of Project Ubin
In 2016, the MAS initiated Project Ubin, a multi-year collaboration with the financial industry.
The project explores the use of blockchain and distributed ledger for clearing and settling payments and securities.
Project Ubin was geared towards developing simpler-to-use and more efficient alternatives to today’s systems, based on central bank-issued digital tokens.
MAS explored the concept of a tokenised Singapore dollar (SGD) for interbank payment in the initial phase. Subsequently, MAS collaborated with the Bank of Canada to study the use of CBDCs for cross-border and cross-currency payments.
One concern about CBDCs is whether the systems set up by individual countries are interoperable – such that the CBDCs can be used for cross-border payments using multiple currencies and across multiple jurisdictions.
MAS’s Project Dunbar seeks to address this issue, partnering with the Bank for International Settlements Innovation Hub Centre in Singapore, together with the Reserve Bank of Australia, Bank Negara Malaysia and South African Reserve Bank.
Project Dunbar explores functional and technical designs, operating models, and governance structures of multiple CBDC or m-CBDC arrangements – with a vision of faster, cheaper and more secure cross-border payments.
When cross-border interoperability of CBDCs between different countries is established, the blockchain technology can allow retail investors to send money to foreign countries in real time. Recipients can receive the money instantaneously.
Mr Heng explains: “This will vastly improve the speed and security of overseas remittances. Remittance fees will also be reduced as the process efficiency improves.”
Last year, the MAS announced that it is embarking on Project Orchid to build the technology, infrastructure and technical competencies that are necessary to issue a digital Singapore dollar. It also aims to explore the potential benefits of retail CBDC solutions.