MAS launches Ubin+ to study cross-border FX settlement using CBDCs

It will study business models and create policy guidelines.

The Monetary Authority of Singapore is piloting Ubin+, which will study cross-border foreign exchange (FX) settlement using wholesale central bank digital currency or CBDC.

Ubin+ will particularly focus on studying business models and governance structures for cross-border foreign exchange settlement, where atomic settlement, based on digital currencies, is expected to improve efficiencies and reduce settlement risks compared to existing payment and settlement rails, MAS said in an announcement. It will make use of distributed ledger technology (DLT) and non-DLT based financial market infrastructures.

Based on the study, MAS will then establish policy guidelines for the connectivity of digital currency infrastructure across borders. 

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Ubin+ is kicking off three studies at its launch. The first is Project Mariana, which explores the exchange and settlement of Swiss franc, Euro, and Singapore dollar wholesale CBDCs with an automated market maker or AMM arrangement. The project is a partnership involving MAS, Banque de France, Swiss National Bank, and the Bank for International Settlements Innovation Hub’s Eurosystem, Switzerland and Singapore Centres. 

MAS is also participating in SWIFT’s CBDC sandbox alongside 17 other central banks and commercial banks to explore cross-border interoperability across digital currencies.

Under Ubin+, MAS will also study possible mechanisms to maintain connectivity across CBDC and other  digital currency networks. 

MAS said that it will also study the use of smart contracts to optimise efficiency and reduce counterparty risks in the settlement of cross-border transactions.