At the Singapore FinTech Festival, Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore (“MAS“), shared the key outcomes MAS wants to achieve, along with the supporting salient initiatives.
Outcomes | Key Initiatives |
Instant Payments –
Make cross-border payments cheaper, faster, and more efficient | Bilateral instant payment linkage: Singapore’s PayNow has linked up with Thailand’s PromptPay, India’s Unified Payments Interface and Malaysia’s DuitNow. Individuals in Singapore can in real-time directly transfer funds to and receive funds from individuals in Thailand, India and Malaysia.
QR payment linkages with China, Malaysia, Thailand and Indonesia allow for seamless transactions by travellers between Singapore and these countries.
Multilateral real-time payment networks: Among other things, MAS has partnered the central banks of Indonesia, Malaysia, the Philippines and Thailand, and the Bank for International Settlements (BIS) Innovation Hub to develop the core foundational work for a multilateral instant payment linkage across the five Association of Southeast Asian Nations (ASEAN) countries. |
Seamless Financial Transactions
Enable financial assets to be transacted seamlessly across multiple trading venues through digital assets, digital money, and interoperable digital networks | Digital assets enabling direct exchange and fractionalisation: Under Project Guardian, MAS is tokenising various asset classes:
(a) foreign exchange for a 24/7 global liquidity pool (a cross-border FX solution to allow secure, interoperable payment solutions across heterogenous networks is on trial);
(b) bonds for seamless cross-border distribution and settlement (a pilot repo agreement with natively-issued digital bonds, working across Switzerland, Japan and Singapore has been executed); and
(c) funds for efficient issuance and trading (pilot issuance of tokenised money market funds through a variable capital company (VCC) structure to maintain the records of share ownership for greater transparency, lower minimum subscription cost and increased efficiency).
Digital money providing a secure and stable medium of exchange: MAS promotes three forms of digital money: (i) wholesale central bank digital currency (“CBDC“), (ii) tokenised bank liabilities, and (iii) regulated stablecoins. It has come up with three main initiatives for the safe and innovative use of digital money in Singapore, primarily (i) Orchid Blueprint which outlines the infrastructure and technology for a digital Singapore dollar; (ii) expanding digital money trials; and (iii) a plan to issue a “live” wholesale CBDC as a common settlement asset in domestic payments. The first pilot will involve the use of “live” wholesale CBDC to settle retail payments between commercial banks. MAS will commence development of this in 2024 where clearing and settlement may occur in a single step on the same infrastructure (this differs from the current system where clearing and settlement take place on different systems, and settlement occurs with a lag).
Regulated stablecoins: MAS is developing a regulatory framework for stablecoins, but the framework will not be ready for at least a year. MAS has adopted an interim approach by acknowledging entities whose stablecoins can already demonstrate compliance with MAS’ regulatory framework. MAS has granted in-principle approval under the Payment Services Act 2019 to three entities, which will issue stablecoins that substantively comply with MAS’ upcoming stablecoin regulatory framework.
Foundation digital infrastructure across multiple distributed ledger technology (DLT) networks, to host and execute digital assets and digital money: MAS and a group of industry players have launched the Global Layer One (GL1) initiative to ease seamless cross-border transactions and enable tokenised assets to be traded across global liquidity pools, while meeting relevant regulatory requirements. |
Trusted Sustainability Ecosystem
Foster a trusted data and disclosure ecosystem to support sustainable finance for the world’s transition to net-zero | Integrated digital platform for seamless Environmental, Social, and Governance (“ESG”) data collection and access, Gprnt (pronounced “Greenprint”), was launched. Gprnt is the brainchild of MAS’ Project Greenprint that consolidates the four utility streams under the project, featuring a disclosure portal, a data registry, a solutions marketplace, and a data orchestrator. In the initial phase, Gprnt provides an enhanced digital reporting solution for large businesses and small and medium enterprises (“SMEs“) to seamlessly report their ESG information. Gprnt is undergoing live testing with selected banks and SMEs, and will be progressively rolled out from Q1 2024 onwards. When fully implemented, Gprnt’s reporting solution is expected to help companies automate their ESG reporting process, and allow end users (e.g. financial institutions, regulators and large corporates) to access relevant data and timely insights to support their sustainability-related decision making. |
