The Monetary Authority of Singapore (MAS), in collaboration with J.P. Morgan and Temasek, has developed a blockchain-based prototype that enables payments to be carried out in different currencies on the same network.
This prototype network, which MAS led, 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 2019.
«We hope this development will encourage other central banks to conduct similar trials, and we will make the technical specifications publicly accessible to accelerate these efforts. We look forward to linking up with more blockchain networks to improve cross-border connectivity. This will be a big step forward in making cross-border transactions faster, cheaper, and safer,» said Sopnendu Mohanty, MAS chief fintech officer, in a media statement on Monday.
Latest Phase of Project Ubin
This development marks the latest milestone for Project Ubin, which is in its fifth phase. Project Ubin is Singapore's collaborative project with the industry to explore the use of blockchain and distributed ledger technology (DLT) for clearing and settlement of payments and securities.
Beyond technical experimentation, this phase of Project Ubin sought to determine the commercial viability and value of the blockchain-based payments network. 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 Capital Markets and Trade Finance
The inclusion of non-financial services companies has demonstrated the applicability of blockchain technology beyond capital markets and trade finance, noted Chia Song Hwee, president and chief operating officer, Temasek.
«J.P. Morgan is excited to be an infrastructure partner of MAS and Temasek for Phase 5 of Project Ubin. By leveraging our key learnings from building the Interbank Information Network (IIN) and the JPM Coin, J.P. Morgan is well-positioned to support the development of a blockchain-based payments network and operate at scale,» said John Hunter, global head of Clearing and Interbank Information Network (IIN) at J.P. Morgan.
