MAS unveils 3 initiatives to ensure safe and innovative use of digital money 

Amongst these initiatives is the expansion of digital money trials.

The Monetary Authority of Singapore (MAS) laid out three initiatives to ensure the safe and innovative use of digital money in Singapore.

The first initiative is the Orchard Blueprint, which outlines the infrastructure required to facilitate digital money transactions.

The blueprint identifies the following infrastructure building blocks for the sound use of digital money in Singapore: 

• Settlement ledger - to record digital money transfers, with supporting features such as native programmability and atomic settlement of digital tokens. 
• Tokenisation bridge – to connect existing account-based settlement systems with ledgers compatible with tokenised forms of digital money. 
•  Programmability protocol - to use Purpose Bound Money (PBM) as a common protocol to specify the conditions for digital money use.  
• Name Service - to translate between unwieldy wallet addresses and alternative name identifiers that are readable and meaningful for verification. 

Part of MAS’ initiatives is to expand digital money trials under Project Orchid. 

Industry players will undertake four new trials on tokenised bank liabilities, wallet interoperability, supplier financing, and institutional payment controls.

UOB, which will explore the feasibility of enabling tokens issued by one bank to be accepted for retail payments by another, said it is excited to work with MAS to unlock the potential of Purpose Bound Money (PBM).

“Our fungibility trial with OCBC will showcase that UOB-issued tokens are fungible with other bank tokens, with interbank settlement done through Wholesale Central Bank Digital Currency (CBDC) on the backend,” said Leong Yung Chee, head of Blockchain and Digital Assets at UOB.
 
To complement the digital money trials, MAS will also kickstart the development of central bank digital currency (CBDC) for wholesale interbank settlement in 2024. 

MAS will pilot the “live” issuance of wholesale CBDCs for the first time, after previously simulating issuance within test environments. 

The first pilot will involve “live” wholesale CBDC for settling retail payments between commercial banks. 

Future pilots could include  “live” wholesale CBDC for settling cross-border securities trade.