The Monetary Authority of Singapore has announced the successful conclusion of the proof-of-concept project to conduct domestic inter-bank payments using distributed ledger technology, or Blockchain.

The project, in partnership with R3, a distributed ledger technology company, and a consortium of financial institutions, was first announced on 16 November 2016 by the Monetary Authority of Singapore (MAS).

The consortium was made up of Bank of America Merrill Lynch, Credit Suisse, DBS Bank, HSBC, J.P. Morgan, Mitsubishi UFJ Financial, OCBC Bank, Singapore Exchange, United Overseas Bank, as well as BCS Information Systems as the project’s technology provider. 

The regulator said that the project has achieved the objectives of producing a digital representation of the Singapore dollar for interbank settlement, testing methods of connecting bank systems to a distributed ledger technology (DLT), and making the MAS Electronic Payment System (MEPS+) interoperate with the DLT for automated collateral management.

The Next Phase 

The consortium has commissioned Deloitte to produce a report that covers the aspects of DLT that are most suited to settlement systems and details the design principles used for the prototype. The report will be made available soon.

MAS has plans for two spin-off projects that will leverage the lessons of the inter-bank payments project.

The first project, driven by the Singapore Exchange (SGX), focuses on making the fixed income securities trading and settlement cycle more efficient through DLT. The second project focuses on new methods to conduct cross border payments using central bank digital currency.

Central Banks to Embrace Blockchain?

MAS is in the early stages of discussions to develop links from Singapore to other countries using DLT to allow cross-border payments to settle directly using central bank accounts.

«This wholesale payments project has demonstrated the commitment of MAS and the industry to co-create concrete use-cases for technologies such as DLT,» said Sopnendu Mohanty, Chief Fintech Officer, MAS.