In a previous article, I shared that MAS was studying using distributed ledger to process interbank payments. MAS at the start was one of the first few central banks to want to dabble in it to actually get their toes wet. The rest were merely exploring the possibility – meaning just talking and pushing papers.
Very recently, MAS published an update on the original Project Ubin, where they announced at Phase 2 of the project. It will lead a group including the Association of Banks Singapore, several financial institutions and technology companies. In this announcement, they have also announced the technology collaborators which are: Accenture was appointed to manage and develop the prototypes.
R3, IBM, and ConsenSys were engaged to provide support on the respective DLT platforms of Corda, Hyperledger Fabric and Quorum. Microsoft was engaged to support the deployment of the prototypes on the blockchain. Collectively, they have successfully developed prototypes of 3 different models for decentralised interbank payments and settlements with liquidity savings mechanisms. No changes were noted for participating financial institutions which include amongst others, DBS, OCBC, HSBC, UOB and the Singapore Exchange.
Of note is that usage of the Azure blockchain which is a departure of the Ethereum chain. I suppose with all the uncertainty involved in a commercial blockchain, the key consideration will be viability and security of the chain and that the data should not be able to be mined by the public.
They will publish the completed report in mid November 2017 at the Singapore FinTech Festival which is in about 1 month’s time!
This is a huge step where MAS is leading the industry to take steps forward in utilising and harnessing the benefits this technology offers. It takes a mindset of daring to change and embrace new technologies to be efficient and to keep its reputation of a FinTech hub. I imagine that in the future interbank payments will be very quick and cost efficient. Whilst replacing MEPS+ is a start, I believe that substantial savings can be realised in interbank payments for regular banking customers – FAST for retail and SME customers hopefully without charge as evidenced by the participation of the local banks and the stock exchange given the sheer amount of daily domestic payments.
I have high hopes that this will succeed given that distributed ledger technology has already existed in some form for at least 10 years. All MAS needs to assure itself is that security of the payments will not be compromised. Now that is paramount!
#MAS #blockchain #SingaporeFinTechFestival #MEPS #FAST #Ubin