By Ledger Insights
The Monetary Authority of Singapore (MAS), the city state’s de facto central bank, has revealed its Project Ubin digital currency experiments have borne fruit with the commercialization of a cross-border payments network.
“DBS Bank, JP Morgan, and Temasek are leading the development of a digital multi-currency payments network aimed at enhancing commercial cross-border clearing and settlements globally. Pilot trials will commence next year,” said Ravi Menon, Managing Director of MAS, during a speech at the Singapore FinTech Festival.
He continued, “The goal of cheaper cross-border payments that settle round-the-clock and in real-time is drawing closer. SMEs will greatly benefit when this becomes a reality.”
More than a year ago, MAS shared the results of the fifth and final phase of Project Ubin, which started as an exploration of central bank digital currency (CBDC) and finished in Phase 5 with commercial usage of both CBDC and private digital currencies issued by banks.
We contacted the participants for more details and DBS Bank, JP Morgan and Temasek provided the following joint statement:
“Project Ubin demonstrated the possibilities to efficiently rearchitect financial market infrastructure using blockchain technology. To expand upon and commercialise the efforts of Project Ubin, DBS, J.P. Morgan, Temasek are working together to develop a new blockchain-based clearing and settlement network to enhance the efficiency of wholesale payments.”
“As part of efforts to build the ecosystem, we will be looking to on-board ecosystem participants, including other banks, to expand capabilities and broaden the network’s offerings and services. Initial focus will be on domestic multi-currency payments, with the intention to expand offerings to a variety of other services progressively.”
“Through the establishment of these offerings, the goal is to build robust and sophisticated financial market infrastructure and create an ecosystem for innovation enabled by blockchain technology.”
“The network will initially be available to banks based in Singapore, with plans to expand access to other financial institutions at a later stage. Pilot trials will commence in 2021 and more details will be shared in due course.”
Separately, JP Morgan’s Head of Wholesale Payments, Takis Georgakopoulos spoke about the project at the Singapore Fintech Festival.
Project Ubin Phase 5 was based on the Quorum enterprise blockchain originally developed by JP Morgan. It used the capability of JP Morgan’s IIN (now Liink) and JPM Coin product, which tokenizes money. At the time, MAS explained to Ledger Insights that the solution supported different issuers, including central banks and commercial banks. The ultimate goal of Phase 5 was to explore a variety of applications to use digital currency, including for bond issuance, cross-border payments, supply chain finance, advertising payments and several other use cases, all of which leveraged blockchain.
MAS jointly issued the Ubin report with Singaporean state-owned investment company Temasek, JP Morgan and Accenture and DBS Bank was a participant in Phase 5. As the largest bank in Singapore, DBS Bank has been a keen adopter of blockchain, especially for trade finance, where it’s involved in dltledgers, Contour, Marco Polo, Trusple and launched its own supply chain finance blockchain targeting Chinese firms. More recently, it revealed plans to launch a B2B digital exchange and security token offerings.
Temasek is no stranger to digital currency as a member of Diem (formerly Libra) and has been working on a blockchain bond issuance platform with HSBC and SGX.
Meanwhile, JP Morgan has set up a separate unit called Onyx, where this new cross border payments venture lives. Last month it said that JPM Coin was being used commercially by a large technology company for cross border payments. Before that, it transferred the Quorum blockchain to ConsenSys, which means the bank can focus on solutions.
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