The Monetary Authority of Singapore (MAS), the city-state's de facto central bank, has released a new report focused on the second phase of its "Project Ubin" blockchain initiative.
The report constitutes a sequel of sorts to an earlier test which involved the MAS and a consortium of major banks, along with distributed ledger startup R3 and professional services firm Deloitte.
And while that phase focused on the digitization of the Singapore dollar as data on a blockchain, the second round tackled an area subject to tests by other central banks world wide: the real-time gross settlement (RTGS) system. Indeed, it represents a kind of natural progression, given that RTGS systems – run by institutions like the MAS – handle large amounts of currency moving from bank to bank.
The second phase of Project Ubin, representatives said earlier this year, was aimed at researching how a system underpinned in part by the tech would compare with existing systems. The test focused on three platforms – Hyperledger Fabric, R3's Corda and JPMorgan's ethereum-based Quorum – and also involved the Association of Banks in Singapore (ABS) and professional services firm Accenture.
As detailed in the report, the project determined that the platforms tested could serve as bases for distributed ledger-based RTGS systems. Notably, the authors state that should such a system come into operation,"the conventional role of a central bank or payment system operator as the centralised infrastructure operator in the ecosystem will be obsolete."
The report states:
Yet as argued, a central bank in that kind of environment would still serve several roles, such as making sure that node operators are running the latest software and resolving any disputes that emerge between parties.
As indicated in the report, Project Ubin is likely to continue in future phases.
One use case up for further testing, according to the MAS, would focus on bond payments. While the exact details aren't clear, the central bank suggested that Singapore's stock exchange may become involved in such an initiative.
"Future phases of Project Ubin could focus on a decentralized bonds payments system, which could be supported by MAS and the participant banks with execution driven by Singapore Exchange. This could deliver a more efficient fixed income securities trading and settlement cycle through DLT," the report stated.
Additionally, the report suggested that some of the technology approaches researched in the first two phases of Project Ubin could be further developed to achieve other purposes, including cross-border payments.
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