The Monetary Authority of Singapore (MAS) started a new initiative called Ubin+ aimed at exploring the use of central bank digital currency (CBDC) for cross-border currency transactions.
Ubin+ will look at testing the use of CBDCs for foreign exchange and liquidity management as well as the connectivity between CBDC and other digital asset networks. Under the project, the bank will also explore how systems based on distributed ledger technology (DLT) could interact with non-ledger payment systems.
While central banks around the world are looking into digital iterations of local sovereign currencies for use by citizens in daily transactions, progress on wholesale CBDCs – that can be built on technologies similar to DLT that underlie crypto and be used exclusively between financial institutions to conduct speedy settlements – has been moving faster, propelled by support from the Bank for International Settlements (BIS) which groups the world’s central banks.
Project Mariana, the measure aimed at foreign exchange and liquidity management, involves MAS, the central banks of Switzerland and France, along with BIS Innovation Hub centers. The project will explore foreign exchange transactions with the Swiss franc, euro and Singapore dollar.
The announcement comes a day after MAS, the central bank of Singapore, started two new projects for trade finance and wealth management products.
As part of Ubin+, MAS says it is also participating in SWIFT’s CBDC Sandbox along with 17 other central banks and commercial banks to test cross-border interoperability.