TL; DR Breakdown
- Singapore CBDC is presently in the works.
- MAS boss says the CBDC will provide major benefits.
- Singapore previously launched its wholesale CBDC.
The creation of Central Bank Digital Currency is now something that most countries worldwide are currently working on. Although others are far ahead regarding the design and testing, others are still carrying out researches. To join the rest of the world looking to debut its CBDC, Singapore is gearing up to release its own CBDC. According to the Monetary Authority of Singapore, the Singapore CBDC would be unveiled in a partnership with Project Orchid Initiative. However, the body has stressed that the CBDC will only be used for retail operations.
Singapore CBDC will provide more benefits to traders
In a statement by the managing director of the authority, Ravi Menon, the developers of the Singapore CBDC, will work together with private companies. He also mentioned that the digital currency would also act as a digital replacement for the countries currency. He gave his speech at the Fintech Festival in Singapore, where he highlighted the features and benefits of the Singapore CBDC.
Talking about the benefits, Menon touched on some vital areas such as secure and fast transactions and making the Singapore CBDC include everyone. He notes that building the country’s CBDC will help them eliminate crimes in that aspect since they will be monitoring it. For example, Menon mentioned the risks associated with trading CBDCs from abroad and private stablecoins like USDT.
Singapore previously launched a wholesale CBDC
Menon said that the country is not urgently pushing to create the Singapore CBDC due to some reasons. He pointed out that the country’s central bank will not facilitate loans if most people decide to hold their cash in digital currency. To company issues like that, Menon stressed that they could place caps and limits on the Singapore CBDC. This means that each person will only be allowed to hold a certain amount of the digital currency at a time.
The MAS had previously designed and experimented with a CBDC for wholesalers. During the project named Ubin, the MAS said they were looking to identify the various use cases that the CBDC will provide. During the testing phase, the MAS joined forces with heavyweights in the crypto sector, such as JP Morgan and DSS Bank. To carry out transactions, the body developed an interbank-focused blockchain known as Partior.
Menon also mentioned that the testing phase for the Singapore CBDC would follow the already laid down guidelines for digital assets in the country. Two weeks ago, Menon said that the MAS was looking into the previous regulations to eliminate threats related to crypto adoption. Some days ago, banking heavyweights in Singapore, DBS Bank, launched its crypto exchange. With the successful launching, the crypto exchange will provide institutional traders with access to trade top tokens.
