The Buzz | Singapore to test digital currency in latest fintech initiative
The Monetary Authority of Singapore is poised to become the latest central bank to test its own digital currency, which it will use in a trial of a blockchain-driven system for interbank payments.
The “proof-of-concept” project, which also involves the city’s stock exchange and eight banks, is aimed at simplifying the payments process and reducing transaction costs, Managing Director Ravi Menon said in a speech yesterday. It may include cross-border transactions with the participation of another central bank in the future, he said.
“Today, banks have to go through correspondent banks to intermediate these payments. It takes time and adds to cost,” Menon said. “This project marks the first step in MAS’s exploration of ways to harness the potential of central bank-issued digital currency.”
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