The Monetary Authority of Singapore (MAS) today launched Ubin+, an expanded collaboration with international partners on cross-border foreign exchange (FX) settlement using wholesale central bank digital currency (CBDC).
Ubin+ will look into how atomic settlement based on digital currencies can improve efficiencies and reduce settlement risks compared to existing payment and settlement rails.
Additionally, it will develop technical standards and infrastructure to support cross-border connectivity, interoperability and atomic settlement of currency transactions across platforms using distributed ledger technology (DLT), and non-DLT based financial market infrastructures.
Ubin+ will also stablish policy guidelines for the connectivity of digital currency infrastructure across borders, for better access and participation. This includes policy relating to governance, access and compliance issues for such linkages.
MAS’ Collaboration With International Partners For Ubin+
The first would be Project Mariana which is a collaborative initiative that explores the exchange and settlement of Swiss franc, Euro and Singapore dollar wholesale CBDCs with an automated market maker (AMM) arrangement.
The project is a partnership involving MAS, Banque de France, Swiss National Bank, and the Bank for International Settlements Innovation Hub’s Eurosystem, Switzerland and Singapore Centres.
The second project involves the interoperability between DLT and non-DLT payment systems.
MAS is participating in SWIFT’s CBDC Sandbox, together with more than 17 central banks and global commercial banks, to explore cross-border interoperability across digital currencies based on DLT and non-DLT payment systems.
The last project will focus on connectivity across heterogenous digital currency networks as wholesale digital currencies could potentially gain traction as a cross-border medium of exchange.
MAS is studying possible mechanisms to maintain connectivity across CBDC and other heterogenous digital currency networks.
The regulator will also look into the use of smart contracts to optimise efficiency and reduce counterparty risks in the settlement of cross-border transactions.
Ubin+ will strengthen Singapore’s capabilities to use digital currency-based infrastructure for cross-border transactions.
The initiative builds on the foundation started with Project Ubin and learnings from MAS’ participation in Project Dunbar