Steps are being taken towards live adoption of a blockchain-based multi-currency payments network prototype
In replying to a parliamentary question of what steps are being taken towards live adoption of a blockchain-based multi-currency payments network prototype, the Government replied that commercial enterprises my materialise soon.
The Government was responding to an MP who asked the Prime Minister:
“with the conclusion of Project Ubin, what are the steps towards live adoption of a blockchain-based multi-currency payments network prototype; and how soon can a pilot launch in Singapore be expected.”
Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS, answered the question on blockchain-based multi-currency payments network prototype adoption and usages in Singapore said:
“Project Ubin is a collaborative industry effort led by the Monetary Authority of Singapore, to explore the use of blockchain technology to clear and settle payments and securities more efficiently. The project will help us better understand the technology and its potential benefits. To date, more than 40 financial institutions, FinTechs and technology firms have participated in the project.
“The findings, technical documentation, and source codes have been published openly, to to encourage commercial applications. One example is JPM-Coin by J.P. Morgan, which was largely developed out of Singapore, by the same team that worked on Project Ubin. Some industry players have also expressed interest in leveraging the project learnings to develop a live commercial offering for multi-currency payments.
“In due course when the commercial endeavour materialises, the parties will make their announcements and share more about their roll-out plans.”
The Monetary Authority of Singapore (MAS) and Temasek on July 13 jointly released a report to mark the successful conclusion of the fifth and final phase of Project Ubin. The report “Project Ubin Phase 5: Enabling Broad Ecosystem Opportunities”, provides technical insights into the blockchain-based multi-currency payments network prototype that was built and describes how the network could benefit the financial industry and blockchain ecosystem.
The report, which Accenture was commissioned to publish, examines the use of blockchain technology in commercial applications across different industries, and how these applications could benefit from integrating with the blockchain-based payments network prototype developed. These benefits were validated through workshops conducted with more than 40 financial and non-financial firms engaged in Phase 5 of Project Ubin.
The key findings of the report include:
- The multi-currency payments network prototype developed under Project Ubin Phase 5 successfully settled payments in different currencies on the same network. An international settlement network, modelled after this payments network prototype, could enable faster and cheaper transactions than conventional cross-border payments channels.
- Project Ubin Phase 5 validated the use of smart contracts on the payments network prototype in use cases such as Delivery-versus-Payment (DvP) settlement with assets on private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.
- The commercial applications of the payments network prototype include cross-border payments in multiple currencies, foreign currency exchange, settlement of foreign currency denominated securities, as well as integration with other blockchain-based platforms to enable end-to-end digitalisation across many industries and use cases.
The payments network prototype, developed in collaboration with J.P. Morgan and Temasek, can serve as a test network to facilitate collaboration with other central banks and the financial industry for developing next generation cross-border payments infrastructure. Technical specifications for the functionalities and connectivity interfaces of the prototype network have been made publicly available to spur further industry development.
Project Ubin is a collaborative project with the industry to explore the use of Blockchain-based and Distributed Ledger Technology (DLT) for clearing and settlement of payments and securities.
The project aims to help MAS and the industry better understand the technology and the potential benefits it may bring through practical experimentation. This is with the eventual goal of developing simpler to use and more efficient alternatives to today’s systems based on central bank issued digital tokens.
The Monetary Authority of Singapore (MAS) in November 2019 announced that it has led the successful development of a blockchain-based prototype that enables payments to be carried out in different currencies on the same network.
This prototype network, developed by MAS in collaboration with J.P. Morgan and Temasek, has the potential to improve cost efficiencies for businesses. It is currently undergoing industry testing to determine its ability to integrate with commercial blockchain applications. The applications that were tested successfully will be showcased at the Singapore FinTech Festival and Singapore Week of Innovation and TeCHnology (SFF x SWITCH) 2019.
This development marks the latest milestone for Project Ubin which is into its fifth phase. Building on the work of Phase 4 of Project Ubin, the payments network will provide interfaces for other blockchain networks to connect and integrate seamlessly. It will also offer additional features to support use cases such as Delivery-versus-Payment (DvP) settlement with private exchanges, conditional payments and escrow for trade, as well as payment commitments for trade finance.
Beyond technical experimentation, the fifth phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network. To date, MAS and its partners have engaged more than 40 financial and non-financial firms to explore the potential benefits of the network.