The Monetary Authority of Singapore (MAS), the de facto central bank of the city-state, has released a new report focused on the second phase of its Ubin project's "blockbusine" initiative.
The report is a continuation of a previous test that involved MAS and a consortium of large banks, as well as the launch of the R3 distributed ledger and the Deloitte professional services firm.
And while this phase focused on the digitization of the Singapore dollar as data on a blockchain, the second round tackled an area subject to testing by other world central banks: the RTGS system (time real gross settlement). Indeed, this represents a kind of natural progression, since the RTGS systems – managed by institutions such as the MAS – manage large amounts of currency that pass from one bank to another.
The second phase of the Ubin project, which representatives mentioned earlier this year, aimed to investigate how a system partially underpinned by technology would compare to existing systems. The test is focused on three platforms – Hyperledger Fabric, R3 Corda and JPMorgan Quorum based on Ethereum – and also involved the Association of Banks of Singapore (ABS) and the professional services company. Accenture.
As noted in the report, the project determined that the platforms tested could serve as a basis for distributed registry-based RTGS systems. Notably, the authors state that if such a system came into effect, "the conventional role of a central bank or a payment system operator as a centralized infrastructure operator in the ecosystem would be obsolete. "
The report states:
"This would also mean that a central operator of financial market infrastructure would not be needed, since processes and data are distributed among DLT network participants An RTGS based system on the DLT reduces costs and resources day-to-day operations and eliminates the risk that the central bank is the single point of failure of the entire financial ecosystem. "
Yet, as it is claimed, a central bank in this type of environment would continue to play several roles, for example by ensuring that node operators use the latest software and resolve any disputes. between the parties.
As stated in the report, the Ubin project should continue in future phases.
A use case for additional testing, according to MAS, would focus on bond payments. Although the exact details are unclear, the central bank has suggested that the Singapore Stock Exchange could participate in such an initiative.
"Future phases of the Ubin project could focus on a decentralized bond payment system, which could be supported by MAS and participating banks with execution by the Singapore Stock Exchange, which could improve the trading and investment cycle. settlement of fixed-income securities. ", states the report.
In addition, the report suggests that some of the technological approaches studied in the first two phases of the Ubin Project could be further developed to achieve other objectives, including cross-border payments.
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